APRNEWS - Egypt’s local banks are at risk of government over-indebtedness, data from the Institute for international Finance showed. Last year, Egypt was the world’s second-largest borrower from local banks, after China. Public debt interests to be paid in 2018 and 2019 are an average of 8% of GDP. Meanwhile, budget deficit stood at 6% of GDP. 

The debt level worsened in Q1 2018. At the end of March, state debt equated to 99.7% of GDP against 98.8% the same period in 2017. According to experts, the big deal does not lie on the volume of public debt. What worries most is the fact that the country’s economy is not growing as fast as debt, raising an over-indebtedness risk. This, despite support from the International Monetary Fund which stimulated the economy.

Local banks’ performance for the second quarter of 2018 is yet to be known. According to data from the central bank, the total outstanding amount of treasury securities and bonds held by banks was EGP1,662 billion ($93 billion).

Ecofin Agency