The IMF and the Egyptian Debt Risks

Source: Egyptian Institute for Studies

Author(s): Mohamed Ahmed Abbas

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On 6 April 2019, the International Monetary Fund (IMF) issued its fourth review of the Egyptian economy under the extended arrangement regarding Egypt’s $12 billion loan agreement with the Fund. The IMF stated some expectations for the performance of the Egyptian economy in the coming years and announced a timetable for lifting subsidies on petroleum products as pledged by the Egyptian government. Most interestingly, the IMF report said that it had conducted a stress test for the Egyptian debt endurance and found that it is sustainable but subject to considerable risk.

This paper attempts to define the stress test, emphasizing its significance, and discuss the structure of the Egyptian debt in light of the latest monthly statistical bulletin issued by the Central Bank of Egypt in February 2019. The results of the stress test will also be reviewed in order to reach recommendations on how to address the Egyptian debt file.

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