Reuters has published a review of historical economic collapse experiences, noting similar signs that apply to countries currently in danger of bankruptcy, including Egypt, Tunisia, Argentina, Ukraine, Ethiopia and Pakistan. The news agency company shed light on the countries facing the risk of defaulting on their external debts, noting that the risk in the Egyptian case is related to the ratio of external debt to foreign exchange reserves. It is expected that Egypt would need to repay $100 billion within five years.
Classic signs of debt crises, such as the collapse of the local currency and the decline in foreign currency reserves, indicated that many developing countries are now in trouble, according to Reuters. Analysts estimate that there is $400 billion in debt, of which Argentina has the most significant amount, with debts amounting to more than $150 billion, followed by Ecuador and Egypt, with obligations ranging between $40 billion and $45 billion.
According to JPMorgan Chase, Egypt’s debt-to-GDP ratio is around 95%. The country is also experiencing one of the most significant foreign exchange outflows this year, estimated at around $11 billion. FIM Partners estimated that Egypt will have $100 billion in hard currency debt over the next five years, including a massive $3.3 billion bond due in 2024. Egypt had devalued the pound by 15% and asked the International Monetary Fund for assistance in March.