S&P upgrades Egypt’s rating to ‘B’ as reforms boost economic growth; Fitch affirms

Written by

admin

in

Oct 10 (Reuters) – S&P Global upgraded Egypt’s rating by a notch on Friday, citing ongoing reforms that have led to a sharp rebound in GDP growth, while Fitch highlighted the country’s fairly high growth potential and strong support from partners in its affirmation.

Fitch last upgraded Egypt’s ratings to ‘B’ in November 2024, when foreign investments and tighter monetary conditions helped build stronger finances, while S&P’s upgrade to ‘B’ is the first since Egypt started receiving financial support around March 2024.

Sign up here.

S&P said the strategic importance of Egypt has been highlighted and elevated by the conflict in Gaza, and has been part of the reason that Gulf Cooperation Council members and other countries continue to extend financial support to Egypt.

“We consider the risk from an escalation of tensions with Israel has increased only moderately over recent months, and energy collaboration continues to progress,” Fitch added in its statement.

Egypt’s annual inflation rate has plunged from a record 38% in September 2023, helped by an $8 billion bailout programme from the International Monetary Fund in March 2024 read more
“Given the stronger GDP growth prospects, increased revenue alongside expenditure control, and primary surplus targets tied to an IMF program, we expect fiscal consolidation to continue, albeit at a gradual pace,” S&P said, opens new tab in a statement.

Alongside the IMF programme, the commitment to a market-determined exchange rate, should continue to support Egypt’s GDP growth prospects and fiscal consolidation efforts over fiscal years 2025-2028, S&P said.

In the April-June 2025 quarter, Egypt’s tourism revenue rose 20%, showing a strong recovery from the impact of the pandemic, while remittances from Egyptians abroad, another main source of foreign currency, rose 36.5%. read more

According to S&P, the reforms undertaken over the past 18 months by the authorities, including the liberalization of the foreign exchange regime, have led to the sharp rebound in Egypt’s GDP growth, boosted tourism and inward remittances.

S&P and Fitch maintained their outlook for Egypt at ‘stable’.

Peer agency Moody’s rating on Egypt remains ‘Caa1’ since October 2023, though it revised, opens new tab its outlook to ‘positive’ from ‘negative’ in March 2024, following significant bilateral support and policy changes.

Reporting by Nishara K.P in Bengaluru; Editing by Shailesh Kuber

Our Standards: The Thomson Reuters Trust Principles., opens new tab

Continue Reading

More posts