Moody's upgrades Egypt's rating to B2 with stable outlook
The rating agency attributed this decision to its expectation that ongoing fiscal and economic reforms will support a gradual but steady improvement in Egypt's fiscal metrics and raise real GDP growth.
It added in a statement that the upgrading also based on Moody's increasing confidence that factors such as Egypt's large domestic funding base support its resilience to refinancing shocks notwithstanding the government's very high borrowing needs and interest costs.
"The stable outlook balances the downside risks posed by very weak debt affordability and large financing needs alongside the longer-term challenges to a shift to a more inclusive, private sector-led growth model, against the possibility that strong reform commitment could deliver higher growth and lower borrowing needs and shore up resilience to changing financing conditions to a greater extent than currently assumed," it added.
Moreover, Moody's has upgraded Egypt's foreign currency senior unsecured ratings to B2 from B3, and its foreign currency senior unsecured MTN program rating to (P)B2 from (P)B3.
Moody's also changed Egypt's foreign-currency bond ceiling to B1 from B2, the foreign-currency deposit ceiling to B3 from Caa1, and the local-currency bond and deposit ceilings to Ba1 from Ba2. The short-term country ceilings for foreign-currency bonds and deposits remain unchanged at Not Prime (NP), according to the statement.
earlier this month, Moody’s Rating Agency said that Egypt’s budget for fiscal year 2019/2020 points to continued fiscal consolidation, describing it as credit positive, expecting Egypt to achieve a growth rate of 5.8 percent in 2019/2020.
It also forecasted a fiscal deficit and a primary surplus of 7.5 percent, and 1.7 percent of gross domestic product (GDP), respectively.
CAIRO - 4 April 2019: Moody's Rating Agency said that Egypt's budget for fiscal year 2019/2020 points to continued fiscal consolidation, describing it as credit positive. According to the recent news published by domestic media, Moody's expected Egypt to achieve a growth rate of 5.8 percent in 2019/2020.