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S&P: Egypt Credit Rating at Stable B with Debt Concerns

The Standard and Poor's building in New York, August 2, 2011. REUTERS/Brendan McDermid
The Standard and Poor's building in New York, August 2, 2011. REUTERS/Brendan McDermid
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S&P: Egypt Credit Rating at Stable B with Debt Concerns

The Standard and Poor's building in New York, August 2, 2011. REUTERS/Brendan McDermid
The Standard and Poor's building in New York, August 2, 2011. REUTERS/Brendan McDermid

Standard & Poor's credit rating for Egypt stands at B with a stable outlook, but the agency warned of financial challenges facing the country in light of its worsening debt crisis.

In a recent report it published, S&P said that competitive exchange rate, improving macroeconomic fundamentals and rising domestic gas production are all reducing Egypt's external financial imbalances.

The agency pointed out that it will make a positive rating step towards Egypt, if economic growth and check in balance exceeded expectations. Those two gauges, if improved, are said to reduce the country's funding crises and to drop its foreign debt.

Egypt will be looking at a better credit rating if its reform program was able to drop government debt significantly.

The agency reports that Egypt’s economic growth in fiscal year 2018 was 5.3 percent, compared to a 4.2 percent in 2017.

This strong growth is supported by activity in the industrial, gas, tourism and construction sectors, the report said. It noted that the Zohr natural gas field, which began production in December 2017, holds great potential for enabling the country to achieve self-sufficiency.

According to the report, the current spending on infrastructure is expected to increase in the coming years, which will help the construction sector continued development.

But the agency stressed that one of the most significant challenges facing the Egyptian economy is interest rates on government debt, which accounts for 9.9 percent of GDP in fiscal year 2018. The interest margin on government debt to public revenues was likely to rise to 48 percent in 2019, compared to a 45 percent the previous year.

In general, a credit rating is used by sovereign wealth funds, pension funds and other investors to gauge the credit worthiness of Egypt thus having a big impact on the country's borrowing costs.

Monthly inflation rose slightly in October to 2.8 percent from 2.6 percent in September.

The country is experiencing a significant rise in the prices of basic food commodities. Local statistics said that tomato prices rose 28.6 percent in October compared to the previous month, while potatoes increased by 15.7 percent and onions by 16.7 percent.

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China Exports Beat Forecasts in June after US Tariff Truce

A container ship arrives at the port in Lianyungang, in China's eastern Jiangsu province on July 14, 2025. (Photo by AFP)
A container ship arrives at the port in Lianyungang, in China's eastern Jiangsu province on July 14, 2025. (Photo by AFP)
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China Exports Beat Forecasts in June after US Tariff Truce

A container ship arrives at the port in Lianyungang, in China's eastern Jiangsu province on July 14, 2025. (Photo by AFP)
A container ship arrives at the port in Lianyungang, in China's eastern Jiangsu province on July 14, 2025. (Photo by AFP)

China's exports rose more than expected in June, official data showed Monday, after Washington and Beijing agreed a tentative deal to lower swingeing tariffs on each other.

Data from the General Administration of Customs said exports climbed 5.8 percent year-on-year, topping the five percent forecast in a Bloomberg survey of economists, said AFP.

Imports rose 1.1 percent, topping the 0.3 percent gain predicted and marking the first growth this year.

China's exports reached record highs in 2024 -- a lifeline to its slowing economy as pressures elsewhere mounted.

Beijing's efforts to sustain growth have been hit by a bruising trade war with the United States, driven by President Donald Trump's sweeping tariffs, though the two de-escalated their spat with a framework for a deal at talks in London last month.

Monday's customs figures showed Chinese exports to the United States surged 32.4 percent in June, having fallen the month before, according to an AFP calculation based on official data.

"Growth in export values rebounded somewhat last month, helped by the US-China trade truce," Zichuan Huang, China economist at Capital Economics, said.

"But tariffs are likely to remain high and Chinese manufacturers face growing constraints on their ability to rapidly expand global market share by slashing prices," Huang said.

"We therefore expect export growth to slow over the coming quarters, weighing on economic growth," she added.

Customs official Wang Lingjun told a news conference on Monday that Beijing hoped "the US will continue to work together with China towards the same direction", state broadcaster CCTV reported.

The tariff truce was "hard won", Wang said.

"There is no way out through blackmail and coercion. Dialogue and cooperation are the right path," he added.

Stuttering growth

Analysts say China's economy is expected to have expanded more than five percent in the second quarter thanks to its strong exports. Official figures are due to be released on Tuesday.

But they also warn Trump's trade war could cause a sharp slowdown in the final six months of the year.

Beijing is targeting an overall expansion of around five percent this year -- the same as last year but a figure considered ambitious by many experts.

First-quarter growth came in at 5.4 percent, beating forecasts and putting the economy on a positive trajectory.

Beijing has struggled to sustain growth since the pandemic as it battles a prolonged debt crisis in the property sector, chronically low consumption and high youth unemployment.

Data released last week showed that consumer prices edged up in June, barely snapping a four-month deflationary dip, but factory gate prices dropped at their fastest clip in nearly two years.

Many economists argue that China needs to shift towards a growth model propelled more by domestic consumption than the traditional key drivers of infrastructure investment, manufacturing and exports.

Beijing has introduced a slew of measures since last year in a bid to boost spending, including a consumer goods trade-in subsidy scheme that briefly lifted retail activity.