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S&P affirms Egypt's credit rating at B for fourth time since pandemic

S&P affirms Egypt's credit rating at B for fourth time since pandemic
Minister of Finance Mohamed Maait

Cairo – Mubasher: The Egyptian Minister of Finance, Mohamed Maait, said that Standard & Poor’s (S&P) has affirmed Egypt’s sovereign credit rating at “B” with a stable outlook for the fourth time since the beginning of the COVID-19 pandemic.

The international credit rating agency praised the country for its strong, resilient, and balanced policies adopted in the face of the pandemic, along with the resumption of economic, financial, and restructural reforms which helped provide a strong and diversified domestic financial base in Egypt and a high balance of foreign exchange reserves, Maait noted in a statement on Tuesday. 

According to S&P, Egypt's economy is expected to achieve an average growth rate of 5.5% in fiscal year (FY) 2023/2024 on the back of the recovery of tourism in Egypt, especially after the resumption of Italian, UK, and Russian tourism in Red Sea resorts.

In addition, the overall budget deficit is seen to narrow to 6.8% in FY21/22 and the public debt to 86% of the gross domestic product (GPD), while the primary surplus is expected to reach 1.5%. 

The Vice Minister of Finance, Ahmed Kouchouk, said that the inclusion of Egypt into the JP Morgan index by the end of January 2022 is expected to inject additional investments into government debt instruments. The international credit rating agency expects that the move will lead to cutting the cost of government borrowing. 

In FY20/21, Egypt managed to cut the overall budget deficit to 7.4% of GDP from 8% a year earlier and achieve a primary surplus of 1.45%.