Egypt’s Economy Gets a Boost with Upgraded Rating from S&P Global
In a positive turn of events, Egypt’s economy has seen an improvement in its ratings as S&P Global recently upgraded its outlook for the country from stable to positive.
The US-based firm also maintained Egypt’s debt rating at “B-/B,” indicating that the country has the capacity to meet its financial obligations despite facing ongoing uncertainties.
According to a statement released by the agency, the exchange rate liberalization and Egypt’s commitment to ambitious budgetary consolidation targets are seen as crucial steps in boosting confidence and growth in the country’s economy and debt sustainability.
However, S&P Global anticipates a slowdown in Egypt’s gross domestic product growth to approximately 3 percent in the current fiscal year due to limited foreign currency availability, high inflation, and tight monetary policy. The agency expects a rebound to 3.8 percent from 2025 onwards.
The agency also highlighted that an increase in foreign currency availability resulting from reduced restrictions on foreign exchange could potentially lead to a further upgrade in Egypt’s ratings.
Earlier this month, the International Monetary Fund approved a support program for Egypt, increasing it from $3 billion to $8 billion following the exchange rate liberalization and interest rate hikes.
Moreover, Egypt secured a $35 billion investment from the UAE in February to develop a part of its Mediterranean coast. The agreement with the Abu Dhabi Developmental Holding Co. aims to develop the Ras El Hekma peninsula, with potential investments reaching up to $150 billion.
Additionally, Egypt is slated to receive €7.4 billion ($8 billion) in aid from the EU to bolster its economy until 2027 amidst conflicts in Gaza and Sudan, as reported by sources.