Public Debt Exceeded the “Safe Limits” in June

Public Debt Exceeded the “Safe Limits” in June



Hossam Zaki, , official spokesman of the Egyptian Foreign Ministry, announced that the Minister Ahmed Abul Gheit has asked  for aid for the Egyptian economy during telephone conversations with foreign officials.
The head of the Central Agency for Accounting stated that Egypt’s public debt reached 89.5% of the gross domestic production in June 2010.
JP Morgan Investments bank has increased the ranking of Egypt’s sovereign debt, while the management of the Egyptian Stock Exchange was closed throughout the whole week.

Zaki said that Aboul Gheit made phone calls with the US Secretary of State Hillary Clinton, British Foreign Secretary William Hague and Saudi Foreign Minister Prince Saud al-Faisal, and asked them to “provide aid to the Egyptian economy, which is greatly influenced by the political crisis that took place in the country”.
Zaki added that the calls with Abu Gheit were centered about the latest developments and talks about what the international community can do to support Egypt in the next phase.

According to the official Saudi Press Agency (SPA), Al-Faisal contacted the Egyptian Foreign Minister and discussed with him “the latest developments in Egypt and what Saudi is capable of doing to the support Egypt in the next phase.”

For his part, Gawdet Almalt, head of the Central Auditing Agency, stated that the public debt of Egypt amounted to about $183.7 billion in June 2010 which is equivalent to 89.5 % of gross domestic product.
The Middle East News Agency reported that Almalt said that the figure includes domestic debt of 888 billion pounds, equivalent to 73.6 % of the general domestic product. He gave no figures for comparison, but said that public debt has exceeded the “safe limits”.

JP Morgan Investments bank pointed out that there is a possibility of political stability during the transitional period before the elections.

Khaled Serry Siam, head of the Egyptian Stock Exchange, said that the stock exchange will remain closed throughout this week, explaining that the decision was taken after consultation with the FSA and the Staff Association of Monetary Market.
Siam added that the demonstrations witnessed by a number of banks have raised fears of a potential non-stability of work in banks and thus decided to maintain the suspension of operations.

A large number of Egyptian banks, including the National Bank, which is governmental, the Commercial International Bank (CIB), which is the largest bank owned by the private sector in Egypt in addition to other banks, have seen mass protests by employees who were protesting against the large disparity in salaries between the new staff, which was appointed in recent years, and the senior staff, which demanded the conversion of their temporary contracts to permanent ones. The Central Bank has decided to close the banks yesterday, after these events.