Cairo – Mubasher: International credit ratings agency Fitch on Monday affirmed its rating for Egypt's long-term foreign and local currency Issuer Default Ratings (IDRs) at a 'B' with a Stable outlook.
Fitch also affirmed its issue ratings on Egypt's senior unsecured foreign and local currency bonds at 'B', the ratings agency said in a statement published on its official website, adding that Egypt’s Country Ceiling has been confirmed at 'B' and the short-term foreign-currency IDR at 'B'.
Citing, Egypt's high fiscal deficit and general government debt to GDP ratio, low foreign-reserve coverage of imports and recent volatile political history, against its low external debt and gradual economic and fiscal reform, Fitch Ratings said these aspects were the main drivers behind its to neither upgrade nor downgrade the most populous Arab country.
Fitch estimated a budget deficit of 11.6% of GDP for the fiscal year ending in June 2016 compared with the previous year, it said, adding that this estimate was due to the government’s failure to introduce the value-added tax (VAT) as planned, it sharp devaluation of the Egyptian pound in March this year, added to “surging interest payments.”
The VAT is expected to raise revenue by about 1% of GDP.
