By Karin Strohecker
WASHINGTON (Reuters) -Egypt is poised to complete another debt swap before the end of this year with its European partners, according to Planning Minister Rania al-Mashat, adding that more such transactions were also in the pipeline for next year.
The transaction, which will see expensive debt swapped for debt at lower costs, with the savings earmarked for a project or other purpose, will be another chapter of the around $1 billion worth of swaps the country has undertaken with bilateral partners such as Germany and Italy since the 1990s.
“Debt swaps are a way to do liability management,” al-Mashat told Reuters on the sidelines of the annual International Monetary Fund and World Bank meetings in Washington.
“They are a way to create more fiscal space and show that collectively our national goals are aligned with international goals, so we expect more debt swaps,” said al-Mashat, the minister in charge of planning, economic development and international cooperation.
She did not give further details on the transaction.
Al-Mashat added that the government hoped the Suez Canal’s contribution to economic growth would turn positive again from mid-2026 onwards after being negative in recent years.
The waterway had become a flashpoint during Israel’s war in Gaza, with revenue from the canal coming under pressure on the back of attacks on shipping by Yemen’s Houthis. The Iran-backed militants say their efforts to shut off cargo bound for Israel are aimed at supporting Palestinians in Gaza, but they have chased ships away from the canal more widely.
“My expectation would be that that contribution (to growth) is at least zero, not negative anymore by June of next year,” al-Mashat told Reuters. “We might be surprised on the upside again, depending on how fast trade can come through the canal.”
(Reporting by Karin Strohecker; Editing by Paul Simao)
