Finance min.: Egyptian economy restoring trust of int’l rating agencies with positive outlook
Egypt’s Minister of Finance Mohamed Maait on Saturday said that the Egyptian economy is gradually restoring the trust of international rating agencies with more stimulating outlook toward further financial stability, after adopting developed, integrated and sustainable economic reform policies.
The state’s latest economic reform policies have contributed to reinforcing the paths of recovery, stability and sustainable growth, creating more job opportunities, along with mobilizing the efforts of supporting the private sector, in line with state’s strategies to achieve sustainable and comprehensive development, Maait said.
Commenting on the latest rating issued by Fitch Ratings, which has revised the Outlook on Egypt’s Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) to Positive from Stable, and affirmed the IDR at ‘B-‘, the minister said that raising Egypt’s outlook by Fitch will contribute to luring further private investments.
“We will continue hard work to enhance Egypt’s outlook during the upcoming credit rating before the end of 2024,” Maait said.
The move comes as a nod to Egypt’s strengthened economic resilience and reduced external vulnerabilities.
The rating agency revealed the key drivers behind the positive outlook, which include: reduced external vulnerability as Egypt has seen a significant reduction in near-term external financing risks, attributed to the Ras El-Hikma deal with the United Arab Emirates (UAE), the adoption of a flexible exchange rate, and tighter monetary policies.
It noted that these measures have unlocked additional financing from international financial institutions (IFIs) and led to a resurgence in non-resident inflows to the domestic debt market.
The Egyptian economy has the ability to fulfill financial needs in the future amid the regional and international difficult challenges resulted by the war in Europe and Gaza alongside tensions in the Red Sea area, the minister said.
Maait added that the new budget of the upcoming fiscal year 2024-2025 aims to record a primary surplus of 3.5 percent and reducing the public debit to 88.2 percent of the GDP.
Minister Maait noted that the financial performance between July 2023-March 2024 has surpassed the expectations and targets of the budget, despite the repercussion of the global economic crises.
The minister said a primary surplus at a value of 415 billion pounds have been reported representing three percent of the GDP, compared with 50 billion pounds that made 0.5 percent of the GDP during the same period of the previous year, recording an annual growth rate of more than eight times.