Egypt Watch

IMF: Egypt’s foreign reserves will decline to $35.3 billion this year

The International Monetary Fund expected that Egypt’s total official cash reserves will decline this year to about $35.3 billion compared to $43.9 billion in 2019, and that it will register about $32.3 billion next year.

The Central Bank of Egypt announced the decline in foreign cash reserves during March, recording about $40 billion, compared to about $45.5 billion in February. This is the first decline since December 2018. The fund expected an increase in the ratio of gross government debt to Egypt’s GDP, to record 87.4 per cent in 2020 compared to 83.8 per cent in 2019, and to reach 90.7 per cent of GDP next year. The ratio of Egypt’s total external debt to GDP will decline this year, to reach 31.9 per cent compared to 34.1 per cent last year, but it will register 32.6 per cent next year. The fund expected the growth rate to decline from 5.6 per cent last year to two per cent this year, before recovering somewhat next year to reach 2.8 per cent in 2021. It also shows the fund’s expectations that the unemployment rate will rise to 10.3 per cent this year compared to 8.6 per cent last year, and then to 11.6 per cent next year. The average inflation rate will drop from 13.9 per cent in 2019 to 5.9 per cent in the current year, before rising again to 8.2 per cent.