Arab Finance: S&P Global Ratings has affirmed its long- and short-term local and foreign currencies credit ratings on the country at “B-/B”, with a positive outlook, according to a press release.

The rating agency noted that the positive outlook reflects the possibility of further improvements in Egypt’s external and fiscal positions

It also reflects the agency’s belief that the new exchange rate regime, driven by market forces, will contribute to fostering gross domestic product (GDP) and, over time, back fiscal consolidation.

Moreover, the agency mentioned that the positive outlook reflects the significant measures undertaken by the Egyptian authorities over the past eight months to address the country’s macroeconomic imbalances.

S&P projects the Egyptian real economic growth to rebound starting 2025 and average 4.2% in the period from 2025 to 2027.

Moreover, it expects that the public sector gross borrowing requirements will rank among the highest of all rated sovereigns for the fiscal year ending June 2025.

However, it projects the effective interest rate on total debt to be lower than the anticipated nominal GDP growth for 2025, facilitating a decline in the debt-to-GDP ratio.

It also anticipates Egypt’s current account deficit to shrink over the period until 2027, as the import backlog is fulfilled and exports increase amid a more competitive exchange rate.

Furthermore, the rating agency forecasts Egypt’s inflationary pressures to remain high in 2024 after the exchange rate adjustment; yet to be moderate from 2025 onward.

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