Cairo – Mubasher: Fitch Ratings affirmed Egypt's long-term foreign-currency (LTFC) issuer default rating (IDR) at ‘B+’ with a stable outlook.
The international credit rating agency ascribed Egypt’s rating to the recent economic and fiscal reforms implemented by the Egyptian government, which led to improved macroeconomic stability and external finances, according to a statement on Monday.
However, “the ratings are constrained by still large fiscal deficits, high general government debt/GDP, and weak governance scores,” the statement showed.
The North African nation’s economy has witnessed improved performance during 2019 as its real GDP grew to 5.6% and inflation rate slowed down to single digits, backed by appreciation of the Egyptian pound, prudent monetary policy, base effects, and a reduction in oil prices.
Fitch expects inflation to stand at 9.5% in 2019 and 8% in 2020/2021, compared to 14.4% in 2018.
Egypt’s real GDP is also expected to reach 5.5% in fiscal year 2019/2020.
Real interest rates are still positive, even after a cumulative rate cut of 450 basis points (bps) this year.
