S&P revises Egypt outlook to ‘stable’ citing IMF support

Standard & Poor’s (S&P) Global Ratings has revised early Friday Egypt’s sovereign credit outlook up to stable from negative with current rating of B-.

Ratings on Egypt remain constrained by “wide fiscal deficits, high public debt, low income levels, and institutional and social fragility.”

The rating agency has projected that Egypt’s real GDP growth will exceed 4 percent by 2019.

It also referred to an increase in Egypt’s inflation in near term on currency devaluation, subsidy cuts on top of interest rate hikes to weigh on domestic consumption.

Revised Egypt’s outlook was to reflect balance between long-standing external and fiscal vulnerabilities among other factors.

Stable outlook balances Egypt’s external, fiscal vulnerabilities, against the International Monetary Fund’s likely support after government’s upfront delivery on programme reforms.

S&P also anticipated that Egypt’s economic growth will start recovering in 2018-2019, fueled by domestic consumption and investments.