Moody's warns of challenging time ahead for Egypt’s debt management
Updated 1/18/2024 9:29:00 AM
Arab Finance: Moody's projected that Egypt might have a tough time handling its debt and securing liquidity due to external challenges that have led to a decline in its local currency and higher interest rates, Al Arabiya reported.
The agency also expected Egypt's fiscal deficit to widen this year, as more than 60% of revenues will go to interest payments in the fiscal year ending in June 2024, leaving the government with very limited financial flexibility to respond to external shocks.
Moody's added that the International Monetary Fund (IMF) program would only cover part of the government's financing needs, so it would have to rely on foreign direct investment (FDI) to fill the gap.
As for the Houthis attacks in the Red Sea, the agency said that they would cut revenues from the Suez Canal under Egypt’s current account balance.
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