Egypt: Foreign debt up $3.5bn in Q4 2023; inflation slows to 32.5% in April

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Egypt‘s foreign debt climbed by $3.5bn in the three months to the end of December, according to central bank data released on Thursday.

Total foreign debt rose to $168bn from $164.5bn at the end of September and $162.9bn at the end of December 2022.

Egypt has quadrupled its external debt since 2015 to help fund a new capital, build infrastructure, buy weapons and support an overvalued currency.

A chronic shortage of foreign currency after the Ukraine crisis triggered an exodus of foreign investors, causing the government to seek support from the International Monetary Fund, which in March agreed to an $8bn package.

Egypt agreed to cut back spending on large government projects as part of the package.

The foreign debt, 82.5 per cent of which was long term, was equivalent to 43 per cent of gross domestic product, the central bank said.

Egypt sees marginal drop in inflation

Egypt’s annual urban consumer price inflation rate decreased to 32.5 per cent in April from 33.3 per cent in March, slowing slightly more than analysts had expected, data from the country’s statistics agency CAPMAS showed on Thursday.

Month-on-month, prices rose by 1.1 per cent in April, up from 1 per cent in March. Food prices declined in April by 0.9 per cent, though they were 40.5 per cent higher than a year ago.

A poll of 17 analysts had expected annual inflation to dip to a median 32.8 per cent, continuing a slowing trend that started in September, when inflation reached a peak of 38.0 per cent.

The central bank has tightened its monetary policy, hiking interest rates by 600 basis on March 6, the same day it signed a $8bn financial support package with the International Monetary Fund and let the currency plummet.

Egypt promised the IMF in the March agreement it would resume tightening if necessary to prevent further erosion of the purchasing power of households.

The government last month also increased the price of a range of petrol, diesel and other fuels, part of a commitment made to the IMF.

Inflation has been elevated for the past year, driven largely by rapid growth in the money supply.