Fitch Ratings has raised Egypt’s long-term foreign-currency debt rating to ‘B’, five steps below investment grade, from B-. The agency also maintained its Stable Outlook for the Egyptian economy.
Egypt is rated one level below that by Standard & Poor’s, and two levels lower by Moody’s Investors Service.
Fitch praised the government’s efforts to reduce budget deficits and said the recent slump in commodity prices will generate further savings.
President Abdel-Fattah El-Sisi announced cuts in subsidies when he took office after winning elections in May.
The country posted a budget deficit of 12.6% of GDP last fiscal year and subsidies, much of them for energy, account for about a quarter of spending.
The agency predicted that the deficit will narrow to 10.2% of GDP in the fiscal year that ends in June, and the burden will start to shrink. It said economic growth will accelerate to 4.7% by 2016, more than double last year’s pace.
Photo Credit: Arabianeye-Reuters
Egypt is rated one level below that by Standard & Poor’s, and two levels lower by Moody’s Investors Service.
Fitch praised the government’s efforts to reduce budget deficits and said the recent slump in commodity prices will generate further savings.
President Abdel-Fattah El-Sisi announced cuts in subsidies when he took office after winning elections in May.
The country posted a budget deficit of 12.6% of GDP last fiscal year and subsidies, much of them for energy, account for about a quarter of spending.
The agency predicted that the deficit will narrow to 10.2% of GDP in the fiscal year that ends in June, and the burden will start to shrink. It said economic growth will accelerate to 4.7% by 2016, more than double last year’s pace.
Photo Credit: Arabianeye-Reuters
Source:
Mubasher
