24 Oct 2021
Fitch Ratings has affirmed Egypt’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at B+ with a stable outlook. The leading ratings agency attributed the positive rating to Egypt’s successful fiscal and economic reforms. Furthermore, they cited the resilience and stability of the Egyptian economy throughout the Covid pandemic as a key driver of the positive rating. Some of the constraints on the rating include large fiscal deficits, a high government debt to GDP ratio, and reliance on short-term portfolio inflows.
As for their economic forecast, Fitch expects the Egyptian economy to grow by 5.5% in FY22-FY23. Egypt’s economic growth performed better during the pandemic than almost all the economies that are rated by Fitch, according to the ratings agency. This remarkable performance was attributed by Fitch to robust domestic demand, the production of natural gas, and the government’s massive public investment program. This offset the hit taken by the tourism and export-oriented sectors due to the pandemic’s negative economic effect. The recent recovery in global demand for tourism, and the increasing tourist inflows to Egypt, will have a significant positive effect on further economic growth. Fitch also expects the government debt to GDP ratio to improve going forward.
(Source: Fitch Ratings (English), Mubasher (English) (Arabic), Zawya (English), Egypt Today (English), al-Sharq al-Awsat (English) (Arabic), State Information Service, al-Maal, Amwal al-Ghad, Hapi Journal, al-Borsa News, Economy Plus Me, al-Aalam al-Youm, al-Ahram, Akhbar al-Youm, al-Youm al-Saabe, al-Watan, Sada el-Balad, al-Sharq Business, al-Arabiya)