Standard & Poor’s maintains Egypt’s credit rating at ‘B’ with stable outlook

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Finance Minister Mohamed Maait on Friday welcomed Standard & Poor’s decision to maintain Egypt’s credit rating in local and foreign currencies at “B”, with a stable outlook for the second time in 2022.

Maait said that this decision reflects the continued confidence of international institutions, in particular rating agencies, in the stability and solidity of the Egyptian economy and its ability to deal positively with difficult external repercussions, the most important of which are the consequences of the war in Europe and the resulting negative economic effects on a global level, in particular: the rise in the price of raw materials.

He added that Standard & Poor’s attributed its decision to maintain the stable outlook for the Egyptian economy to its expectation of continued commitment from the Egyptian authorities to implement economic and structural reforms that would boost economic growth supported by an increase in the role of the private sector in economic activity, in addition to the institution’s analysts’ expectation that the Egyptian economy will achieve high growth rates in the medium term through the adoption of policies and reforms investment and business environment that support sustainable economic growth .

He pointed out that the Company highlighted in its report the decrease in the total deficit to 6.1% of GDP, compared to 6.8% of GDP in the financial year 2020/2021.

He explained that the report published by Standard & Poor’s indicates a significant improvement in current account indicators for the financial year 2021/2022, with non-oil export proceeds having reached a remarkable increase of 29% annually in light of the current situation. increase in exports. fertilizers, medicines and ready-to-wear, and a large surplus was recorded on the oil balance which is 4.4 billion dollars, taking into account the expansion of natural gas exports, which have recently reached 600 million dollars per month, and the Suez Canal reached a record which is the highest in history, reaching 7 billion dollars.

He pointed out that remittances from Egyptians working abroad have continued to reach high levels over the past year, amounting to around 32 billion dollars and that income from the tourism sector has significantly increased. increased over the past year in light of the recovery of the sector, which reached a revenue of $10.7 billion with the diversity of tourism sources to witness the influx of new markets. In addition, foreign direct investment proceeds increased by 71% to approximately $9.1 billion from approximately $5.2 billion in fiscal year 2020/2021.

Maait said the war in Europe led to sharp rises in commodity prices and tighter global monetary conditions, which led to a large outflow of capital from emerging markets in general, including the Egyptian market, but Standard & Poor’s does not expect any further capital outflows and that this is not a likely scenario in Egypt, given improving macroeconomic conditions in addition to increased inflows from Gulf Cooperation Council countries. to Egypt and the Egyptian government’s intention to attract an estimated revenue of around $10 billion per year over nearly four years in FDI.

Ahmed Kouchouk, Deputy Minister of Finance in charge of Financial Policy and Institutional Development, confirmed that Standard & Poor’s has commended the state’s continued efforts to improve the operating environment for businesses in its report and analysis. that supports strong and sustainable medium-term growth in Egypt.

He pointed out that in this context, the credit rating institution indicated the imminent publication of the State Shareholding Policy document in its final form, which helps to underline the will of the Egyptian State and its institutions to encourage and attract the private sector to increase its investments and a strong presence in the Egyptian market and increase its strong contribution to economic growth in the coming period.

He explained that the state ownership policy document and accompanying reforms represented a “road map” to increase the role and contribution of the private sector in economic activity.

He added that Standard & Poor’s can improve Egypt’s credit rating in the coming period if the economic expansion in Egypt is high and strong, and if the reform program actually implemented during the coming period is able to attract more external flows into the country and achieve a significant reduction in public debt levels as a percentage of GDP and ensure access to sustainable external financing in difficult economic conditions.



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