Moody’s Ratings upgraded Egypt’s sovereign credit rating to B3 from Caa1, citing improved public finances, stronger revenue collection and economic reforms that have helped put government debt and interest burdens on a declining path.
The agency maintained a positive outlook, reflecting the potential for further improvement in the country’s debt burden and borrowing costs. The upgrade, announced last Friday, applies to the government’s long-term local- and foreign-currency issuer ratings and foreign-currency senior unsecured debt ratings.
The move follows similar decisions by other major rating agencies. S&P Global Ratings affirmed Egypt’s sovereign ratings at B/B with a stable outlook, while Fitch Ratings affirmed its B rating with a stable outlook on October 8. Meanwhile, Egypt’s annual core inflation eased to 14.1 per cent in September, although rising food prices continued to squeeze household budgets.
“The upgrade to B3 is driven by Egypt’s fiscal consolidation and structural reforms, which have placed government debt and interest burdens on a declining path, albeit from elevated levels,” Moody’s said in its report.
Egypt’s Finance Ministry welcomed the upgrade, saying the government would continue pursuing fiscal reforms while supporting economic growth and job creation.
“Our priorities remain centred on adopting balanced fiscal policies that support robust growth, generate sufficient and appropriate job opportunities, and advance inclusive development efforts,” the ministry said in a statement.
The ministry said it remained committed to reducing debt-servicing costs, increasing budget revenues and keeping government debt on a downward path.
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