World Bank: Egypt to Repay $20.3 Billion in H2 2025

See - Sada Elbalad

2 days ago

Taarek Refaat
Egypt is scheduled to repay $20.3 billion in external debt obligations during the second half of 2025, according to newly released data from the World Bank.
The figure includes $4.6 billion in deposits, most of which are owed to Gulf Cooperation Council (GCC) countries, underscoring Cairo's mounting short-term liabilities amid ongoing efforts to stabilize its external balance sheet.
The disclosure comes as Egypt faces a surge in debt service requirements over the coming quarters. In Q1 of 2026 alone, repayments are projected to climb to $23.8 billion, including $13.6 billion due in that quarter.
Egyptian Prime Minister Mostafa Madbouly responded to the data by reaffirming the government's commitment to honoring all dollar-denominated obligations.
'The Central Bank's report clearly shows our full commitment to repaying external dues,' Madbouly said in a recent statement, emphasizing ongoing fiscal discipline and structural reforms.
He added that the government remains focused on securing a sustainable downward trajectory for external debt, while ramping up efforts to attract new foreign direct investment (FDI) across strategic sectors. These initiatives aim to reduce reliance on external borrowing by diversifying funding sources for public and private projects.
A significant portion of Egypt's upcoming debt obligations stems from Gulf deposits, extended during recent financial support packages from Saudi Arabia, the UAE, and other GCC countries.
While those funds helped stabilize the Egyptian economy in recent years, they are now coming due. However, the International Monetary Fund (IMF), in its fourth program review, noted that Gulf countries have signaled no plans to recall the deposits before the end of the IMF program. Instead, some of these holdings could be converted into equity investments, potentially easing Egypt's short-term debt pressures.
The Egyptian government is currently negotiating such deposit-to-investment conversions, which could restructure the debt profile and improve the country's external financing outlook.
As of the end of March 2025, Egypt's external debt stood at $156.7 billion, up from $155.1 billion three months earlier. This increase was largely driven by a $2.8 billion rise in government borrowing, which reached $82 billion.
At the same time, external loans held by The Central Bank declined slightly to $34 billion (from $34.25 billion), commercial banks dropped to $20.9 billion (from $21.7 billion), and other sectors fell marginally to $19.7 billion.
Despite these marginal declines, the IMF anticipates a sharp increase in Egypt's total external debt by the end of the current fiscal year, projecting it to reach $180.6 billion, up from an earlier estimate of $162 billion. This represents a $41 billion upward revision compared to the third program review in August 2024, raising concerns over Egypt's debt sustainability targets.
The updated figures put additional pressure on the Egyptian government to accelerate reforms, attract long-term capital, and reduce its reliance on short-term borrowing. Analysts warn that failure to meet these goals could lead to credit rating downgrades, higher borrowing costs, and greater vulnerability to external shocks.
However, ongoing IMF support and potential Gulf investment inflows provide Cairo with breathing room, if effectively managed.
Economic Reforms Bring Fiscal Gains and Public Pain
Since re-engaging with the International Monetary Fund, Egypt has pursued a bold agenda of liberalizing its economy. The most consequential measure came with the free-floating of the Egyptian pound, which while praised by international markets for improving competitiveness, triggered a wave of inflation that has hollowed out household purchasing power.
Simultaneously, the removal of subsidies on energy and electricity, long a cornerstone of Egypt's social safety net, has made daily living costs unbearable for millions, particularly the country's shrinking middle class.
'The IMF program looks sound on paper,' said one Cairo-based economist who requested anonymity, 'but its real-life application has led to sharp income erosion and a rise in poverty. For many Egyptians, the cost of reform is simply too high.'
Headline inflation has remained persistently elevated, hovering above 30% for much of the year. Food, fuel, and transportation prices have surged, with salaries failing to keep pace. The urban middle class, once considered the backbone of economic modernization, is being squeezed out, forced to cut spending, downsize, or rely on remittances.
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