Fitch upgrades Egypt’s rating to ‘B’ w/ stable outlook

Fitch Ratings has upgraded Egypt’s Long-Term Foreign-Currency Issuer Default Rating to ‘B’ from ‘B-‘, with a stable outlook, reflecting improved external finances and policy adjustments. Key drivers include increased foreign investments, enhanced exchange rate flexibility, and tightened monetary policies.

Egypt’s international reserves rose by $11.4 billion in the first nine months of 2024, driven by the Ras El-Hekma investment and the IMF and EU inflows. These capital inflows, alongside reduced public spending, are expected to ease the country’s debt burden and help narrow its current account deficit.

Inflation declined to 26.4 per cent in September, with further reduction expected through 2026, while banking sector stability offers additional support. However, risks remain due to high public debt, and regional conflicts, highlighting the importance of ongoing reforms to sustain economic resilience.

Attribution: Fitch Ratings

Subediting: M. S. Salama