Fitch Ratings has affirmed Egypt’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at “B” with a “Positive Outlook”, the rating agency announced in a report on Monday.
Commenting on the report in a press statement, Minister of Finance Mohamed Moeit stressed that Fitch’s rating reflects the world agency's appreciation of the economic reform program carried out by the government.
The decision will help boost confidence in the Egyptian economy and attract more foreign investments, he said in a statement.
The current stage of Egypt's economic reform program focuses on increasing economic growth rate, attracting more investments and decreasing budget deficit, he said.
This is the third positive review by credit rating agencies to the Egyptian economic reform program since 2016, Moeit said.
He expected Egypt's outlook rating to raise further within the coming period if economic indicators continue to improve.
“The current phase of the economic reform program focuses on increasing economic growth rates, employment rates and private investments,” Moeit stressed.
“It is important to maintain the downward path of budget deficit and indebtedness as a percentage of GDP and create a financial space that allows increased spending on human capital development areas to ensure sustainable funding for targeted reforms in the health and education sectors.”
The minister pointed to the new financial control package, which was implemented in the new fiscal year within the framework of the economic reform program.
The package includes the implementation of a new phase of the rationalizing energy subsidy program, which will contribute to the continued improvement of public financial indicators after the ministry of finance succeeded in achieving a preliminary surplus before the repayment of debt benefits by balancing 2017-2018 for the first time in 15 years, reducing the overall deficit of GDP to 9.8 percent, Moeit explained.
In this context, Deputy Finance Minister Ahmed Kouchouk underlined the importance of keeping high growth rates within the coming years and diversifying growth sources.
He said Fitch report attributed the progress of the national economy to the Central Bank of Egypt's decision to liberalize the Egyptian pound in 2016, a move that led the non-petroleum exports to hit a record rise in the first quarter of 2018, the first in seven years.
Kouchouk said the report also talked about some challenges that may affect Egypt's economic outlook if not seriously addressed, including keeping safe foreign cash reserves and the ability to continue applying reforms aiming to decrease public debt.
