Fitch affirms Egypt’s rating at ‘B’ with stable outlook

Fitch Ratings on Friday affirmed Egypt’s Long-Term Foreign-Currency IDR at ‘B’, maintaining a Stable Outlook, reflecting a balance between the country’s economic potential and ongoing fiscal and geopolitical challenges.

The agency expects GDP growth to reach 4.4 per cent in FY25, rising to 4.7 per cent in FY26 and 4.9 per cent in FY27, while inflation, down from 26.5 per cent to 11.7 per cent in September 2025, is forecast to average 12.3 per cent in FY26 and decline to 10.4 per cent in FY27.

Public debt remains elevated at 77 per cent of GDP but is expected to fall over FY25–27, with debt interest as a share of revenue projected to drop from 64 per cent in FY26 to 40 per cent by FY29. The government deficit is likely to stay at 7.5 per cent of GDP in FY26 before narrowing to 6.5 per cent in FY27.

Gross international reserves reached $47.0 billion in the first nine months of 2025, with Central Bank net foreign assets at $10.7 billion, covering an estimated 4.2 months of external payments by June 2027.

The current account deficit is expected to narrow to 2.8 per cent of GDP, supported by rising remittances, tourism, and foreign investment averaging $15.5 billion.

Fitch noted that while Egypt benefits from a large economy, strong growth potential, and multilateral support, it faces challenges including weak public finances, high debt service, external financing needs, inflationary pressures, and elevated geopolitical risks such as a 59 per cent drop in Suez Canal revenues. Structural reforms have progressed moderately, particularly in state-owned enterprise management. Egypt’s banking sector remains resilient, with strong liquidity and a 63 per cent loan-to-deposit ratio. On ESG factors, governance—covering political stability, rule of law, and corruption control—is critical, though Egypt ranks below the 50th percentile of global peers.

Attribution: Amwal Al Ghad English

Subediting: Y.Yasser