Egypt’s Fitch Ratings Agency Upgrades Outlook to Positive

Egypt’s future outlook upgraded to positive by Fitch

On Friday, Egypt’s financial prospects took a positive turn as Fitch Rating Agency upgraded its outlook from stable to positive, while maintaining its rating at (B-). The agency highlighted the low risks of external financing and the strength of foreign direct investment in Egypt as key factors behind this decision.

In March, the International Monetary Fund approved $8 billion in expanded financial support for Egypt to help the country gradually reduce its debt burden. This move by the IMF has been seen as a vote of confidence in Egypt’s commitment to fiscal reforms and debt reduction measures.

Moody’s credit rating agency had previously revised Egypt’s outlook to positive in early March while keeping its rating unchanged, citing the high proportion of government debt and weak debt sustainability compared to its peers. However, Fitch noted that initial steps to contain off-budget spending would reduce the risks of public debt sustainability. They emphasized that exchange flexibility would be more sustainable going forward, partly due to close monitoring in the context of the Extended Fund Facility Program with Egypt set to continue until late 2026.

This positive outlook reflects a positive trend for Egypt’s economic stability and growth potential in the future, with continued support from international financial institutions like the IMF. The country’s commitment to fiscal reforms and debt reduction measures has been recognized by rating agencies, indicating confidence in Egypt’s financial stability and growth prospects.

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