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External Debt: Final Standards

By Anas Elshamy

Assalamu Alikum,

These are the final standards that we at the group came up with. Please, aplly based upon them using the actual indicators and if you have any, please come forward with it.

* For most countries (those with an export-to-GDP ratio of less than 30% and with a low debt in relation to fiscal revenues despite a relatively moderate revenue performance (less than 15% of GDP), a country’s debt is deemed to be ‘unsustainable’ if the Net Present Value of its total external debt is more than 150% of its average exports.

* For countries which are exceptionally open (with an export-to-GDP ratio of more than 30% and with a very high debt in relation to fiscal revenues despite a relatively good revenue performance (above 15% of GDP) a debt to revenue criteria is applied. For these countries, the debt sustainability target is set so that the Net Present Value of debt is at 250% of revenues at the decision point.

Please all, let us start applying through indicators and finding out the current situation of Egypt.

Our Regards

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This entry was posted on 30 November, 2008 at 2:49 pm and is filed under Report. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

2 Responses to “External Debt: Final Standards”

  1. Anas Elshamy Says:
    3 December, 2008 at 7:38 pm

    Asslamu Alikum,

    * To know which criteria we will aplly on Egypt, we need firstly to calculate the “export-to-GDP” ratio for the Egyptian Economy.

    The latest figures for both elements are as follows:

    - Export Proceeds in the trade balance(US $ Billion) at 30/06/2008: 8.518
    - GDP at factor cost (current prices)( $ Billion ) at 30/06/2008: 158.6

    Therefore: export-to-GDP ratio is 0.05 or 5 %

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    Based on such ratio, Egyptian economy falls under the first classicfication as the ratio is less than 0.3 or 30%

    —–

  2. Anas Elshamy Says:
    3 December, 2008 at 8:07 pm

    Other indicators that may help us in analyzing the current situation of External Debt in Egypt:

    - External Debt (US $ Billion) at 30/06/2008: 33.9
    - External Debt as a Percentage of GDP(%) at 30/06/2008: 20.1
    - External Debt service as a percentage of service & commodity exports receipts (%) at 30/06/2008: 5.1
    - Installments Payments of External Debt (US $ Billion) at 30/06/2008: 2.119
    - Revenues for the FY 2007/2008 (US $ Billion): 33.6

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