Global debt is no small matter: Global debt hit a fresh record of just over USD 307 tn in 3Q 2023 and the debt-to-output ratio among emerging markets also reached new territory, according to a report by the Institute of International Finance (IIF) cited by Reuters. The world’s total debt is expected to climb to USD 310 tn by the year’s end, which would represent an increase of 25% in the last five years.

Populism could be making things worse: An era of geopolitical uncertainty and increasing political polarization could tip the balance in favor of populist policies in upcoming elections around the world, the IIF report estimates.Populist governance could lead to Increased government borrowing and spending, as well as with lax fiscal policy that would “create further volatility in the markets,” the group’s director of sustainable research said in a press briefing cited by the newswire.

Emerging markets are the most vulnerable to increasing levels of debt: The debt-to-GDP ratio in emerging markets rose to 255% in the third quarter of the year, largely down to spiraling debt in Russia, China, Saudi Arabia, and Malaysia. This figure is up 32 percentage points from the same period five years ago, whilst global debt-to-GDP, which includes developed markets, held steady at 333%.

We are in “alarming” levels of debt: The IIF singled out us and Pakistan as the countries whose total revenues were most consumed by debt repayments. In the first two months of the current fiscal year, our debt servicing bill came in at around EGP 392 bn, which represented almost double the revenues made in the same period, according to the Finance Ministry.

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THE CLOSING BELL-

The EGX30 rose 1.0% at Thursday’s close on turnover of EGP 3.4 bn (29% above the 90-day average). Local investors were net sellers. The index is up 67.0% YTD.

In the green: Orascom Development (+5.6%), Palm Hills Development (+5.0%) and Qalaa Holdings (+5.0%).

In the red: CIRA Education (-2.7%), Madinet Masr (-0.8%) and Talaat Moustafa Group (-0.4%).

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