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S&P affirms Egypt’s B-/B rating

S&P affirms Egypt’s B-/B rating
Photo Credit: Arabianeye-Reuters

Mubasher: Standard and Poor's (S&P) has affirmed its sovereign ratings for Egypt at B-/B, with a stable outlook, according to a recent report.

The ratings agency said that stable outlook balances risks arising from Egypt's large external and fiscal deficits, against financing support from the International Monetary Fund (IMF) program, adding that despite large fiscal deficit, it does not expect the government to face problems raising debt domestically.

The report also added that ratings on Egypt remain constrained by wide fiscal deficits, high public debt, low income levels, and institutional and social fragility.

S&P is anticipating ongoing fiscal consolidation in Egypt over 2017-2020, supported by the three-year IMF program.

Standard and Poor's also projects Egypt's fiscal deficits to decline from a current average of 12% of GDP during 2012-2016, to an average of 8.6% in between 2017 and 2020.

As per the report, Egypt's real GDP is projected to continue to grow at a moderate rate of just under 4% on average over the three-year period (2017-2020), as foreign borrowing will become increasing important for financing Egypt's fiscal deficit.