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Standard & Poor's revises Egypt outlook to 'negative'

Standard & Poor's revises Egypt outlook to 'negative'
Standard & Poor's (Photo credit: Arabianeye-Reuters)

 

Cairo – Mubasher: Standard & Poor's (S&P) on Friday said it revised its outlook for Egypt's long-term sovereign from 'stable' to 'negative' and maintained its rating a 'B-'.

The ratings agency cited "external and fiscal difficulties" as the reason behind the downgrade.

"The negative outlook reflects our view that Egypt's external and fiscal vulnerabilities might increase further over the next 12 months. We consider that this could dampen the country's economic recovery and exacerbate sociopolitical tensions," S&P said in a statement.

It added that Egypt's economic recovery will be affected by the decline in foreign currency reserves as well as domestic and external financing pressures.

Egypt's financial situation is moving slowly, however we expect the decline in oil prices and revenue-boosting steps taken to reduce the general deficit in the coming years, S&P noted in its report.

Egypt's foreign currency reserves dropped from $36 billion in January 2011 to $16.5 billion by the end of April 2016.

The International Monetary Fund (IMF) previously estimated 3% growth for Egypt in 2016, compared to 4.2% in 2015.