Goldman Sachs Bank expected that Egypt’s financing needs over the next four years will total 25 billion dollars, under a basic scenario that assumes the conclusion of a new agreement with the International Monetary Fund in the coming weeks, and the success of local authorities in implementing this agreement, as published by “Bloomberg”.
Farouk Sousse, economist at Goldman, said that these needs include a cumulative external financing gap of approximately 8 billion dollars over the next four years, and it is expected that this financing gap will reach about 4.4 billion in 2024, 2.3 billion dollars next year, and one billion dollars in 2026, before being successfully repaid in 2027.
The financing needs also include another USD 17 billion in cash inflows, which Egypt needs to address the deficit of net foreign assets in the financial sector, which Sousse sees as a crucial factor to revive activity in the exchange market and enhance confidence in the pound.
The total deficit of foreign assets of Egyptian banks, including the central bank, increased to a historic level of 27.194 billion dollars at the end of last December, up 1.1% from the previous month.
In calculating the financing needs, Goldman relied on the premise of extending the term of deposits of the Gulf countries at the central bank, and raising the net foreign assets of banks to their historical average of Zero, which is considered an “achievable goal”.
It is worth mentioning that the IMF mission announced that an agreement is close to being reached with the Egyptian authorities to determine the amount of additional support needed to fill the growing funding gap in the country, after the end of its visit to Cairo last Thursday.