The reassuring remarks of the Egyptian Prime Minister come after the concerns of the markets, raised by two recent alarming reports from the rating agencies Moody's Investors Service and S&P Global Ratings on the situation of the country's public finances.
Egypt is fully capable of meeting its obligations to repay its foreign debt, Prime Minister Mostafa Madbouly assured on April 29, thus trying to dispel market concerns about the solvency of the most populous country. of the Arab world.
“I reaffirm to you that the Egyptian state has not failed and will not fail to repay its Eurobonds,” he told an economic conference in Cairo. And to add: “So far, we have not taken any delay in the repayment of our Eurobonds and God willing, this will continue”.
The Prime Minister’s reassuring words come after concerns raised by two recent alarming reports from ratings agencies Moody’s Investors Service and S&P Global Ratings on the state of the country’s public finances.
Moody’s Investors Service said in a report released on April 27 that “Egypt’s debt carrying capacity and debt sustainability profile are increasingly at risk from the country’s declining foreign currency holdings.”
In a press release published on April 21, S&P Global Ratings indicated for its part that a lack of progress in the implementation of reforms supported by an IMF financing program could increase the risk that international donors, including including the oil-rich Gulf monarchies, delaying or canceling the disbursement of funding promised to Egypt.
The rating agency clarified in this context that the Egyptian State could in this case have great difficulty in covering its high needs in external financing, which are estimated at around 17 billion dollars for the 2022/2023 financial year. (July 1/June 30) and $20 billion for the following fiscal year.
S&P Global Ratings, which just downgraded Egypt’s sovereign rating outlook from stable to negative, also noted that “reducing the government revenue-to-debt interest payment ratio will be a major challenge” for the country. .
Egypt’s external debt stocks reached $162.9 billion as of December 31, 2022, up 5.1% from their level reached on September 30 of the same year.