Cairo – Mubasher: Fitch Ratings maintained Egypt’s long-term foreign-currency issuer default rating (IDR) at ‘B+’ with a ‘stable’ outlook.
The rating affirmation was “supported by a recent track record of fiscal and economic reforms, policy commitment to furthering the reform programme and ready availability of fiscal and external financing in the face of the COVID-19 pandemic,” according to a statement late on Monday.
The economic reforms implemented in the recent years have given the most populous Arab nation “a degree of flexibility” to face the COVID-19 crisis at its current rating.
However, “the pandemic still presents risks to Egypt's credit metrics depending on the duration of the global health crisis.”
Egypt’s real gross domestic product (GDP) growth is expected to be at 2.5% in fiscal year 2020/2021, compared to an average of 5.5% in FY17/18 and FY18/19, before recovering to 5.5% in FY21/22 and averaging at over 5% in the medium term.
The recovery will come on the back of the return of tourism, growth in the energy and manufacturing sectors, and improvements in the business environment.
Inflation is forecast to be more than 6% in 2020 and 7.5% in 2021.
Moreover, the international credit rating agency expected the country’s budget deficit to increase to 9.5% of GDP in FY20/21 from 8.8% in FY19/20.
