Egypt’s debt crisis and falling credit outlook are impacting the economies of high-yield sovereigns elsewhere in Africa, global investment bank Goldman Sachs has warned.
Egypt was badly impacted by the Russian invasion of Ukraine in February 2022, having relied on wheat imports and tourism revenues from both countries. Overbearing state and military interference in business has also deterred investment in the country and subsidies have shrunk the state budget.
Over the last year or so, the Egyptian pound has tumbled, inflation has increased and foreign currency has dried up. Inflation has been increasing in Egypt over the last year with a 33.9% rise in March despite the central bank raising interest rates.
Egypt has around $39 billion of outstanding debt in dollars and euros, including $3.3 billion due in 2024, according to data compiled by Bloomberg. In February, a ratings agency downgraded Egypt’s credit rating, changing its outlook from stable from negative.
