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Egypt's outlook rating revised to ‘Positive’ - MERIS

Egypt's outlook rating revised to ‘Positive’ - MERIS
"Greater participation of the shadow economy will significantly slash government debt/GDP"

Cairo - Mubasher: Egypt's government must take further steps towards the engagement of the informal sector into the formal economy, which in return will boost the country's gross domestic product (GDP), chairman of Middle East Rating & Investors Service (MERIS) told CBC channel.

"Greater participation of the shadow economy will significantly slash government debt/GDP," Amr Hassanein added.

Fitch Ratings on Tuesday upgraded Egypt's outlook to ‘Positive’ from ‘Stable’, while maintaining the nation's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B'.

The international ratings agency said that Egypt's outlook was revised to positive on the back of the "significant progress with its reform programme in 2017 and remains on track with the $12 billion three-year Extended Fund Facility (EFF) signed with the IMF in November 2016."

Commenting on Fitch’s report, the economy expert said: “it is a key move towards upgrading the IDR within 6-12 months if Egypt’s economic conditions remain on an upward trajectory."

The North African nation's informal or shadow economy amounted to EGP 1.8 trillion, prime minister Sherif Ismail said in November.

In October 2017, planning minister Hala Al-Saeed stated that the informal sector's participation in Egypt's economy amounted to 40% of GDP.

Through a raft of measures, the government is at pains to accomplish the financial inclusion in a bid to spur the informal economy to join the formal sector.

By achieving this end, the formal economy of the Arab world's most populous country will jump to more than EGP 5 trillion from EGP 2.8 trillion.