Analyzing Egypt’s Debt Sustainability Using SimSIP Debt: The Debt Projection Module

Faculty Commerce Year: 2019
Type of Publication: ZU Hosted Pages:
Authors:
Journal: The Journal Of American Science http://www.jofamericanscience.org Volume:
Keywords : Analyzing Egypt’s Debt Sustainability Using SimSIP    
Abstract:
Debt sustainability is a critical factor and a key consideration for decision making with respect to all public projects and economic policies. In this econometric study, we use the debt projection module of SimSIP (Simulations for social Indicators and poverty) Debt to simulate the evolution of Egypt’s public debt over a 15-year horizon (from the fiscal year 2016 to the fiscal year 2031) by using dynamic analyses of the variables under three different macroeconomic scenarios and two different financing scenarios of an ambitious government-Ied investment strategy. The study results show that the debt is not sustainable. According to the results of the optimistic macroeconomic scenario, Egypt's achievement of financial sustainability in the medium-term depends on increasing its economic growth rate to at least 10% and improving its balance of payments situation by increasing the growth rate of exports and reducing imports, in addition to reducing the deficit of the State budget through a contractionary fiscal policy, and targeting the appreciation of local currency; besides the reduction of the inflation rate to no more than 3%.
   
     
 
       

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