Finance min.: Egypt only country in Middle East, Africa to retain global assessment institutions’ ratings

CAIRO – 22 April 2022: Egypt’s Minister of Finance Mohamed Maait said Egypt has been the only country in the Middle East and Africa to retain the confidence of the three international assessment institutions of Fitch Ratings, S&P Global Ratings, and Moody’s.

Fitch’s recent affirmatio of Egypt's credit rating at B+ for the fourth time during the coronavirus pandemic is considered an international certificate of trust in the Egyptian economy’s ability to face the current global economic difficulties, Maait said in a statement on Friday.

The Egyptian economy is diversified and is growing, Maait said, adding that the financial and economic reforms have made the country more solid and cohesive in dealing positively with global crises.

Egypt recorded its highest semi-annual growth rate since the beginning of the millennium at 9 percent of GDP during the period from July to December 2021, Maait said.

Fitch Ratings affirmed Thursday Egypt's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B+' with a Stable Outlook.

Fitch elaborated in a report that Egypt's ratings are supported by its recent record of fiscal and economic reforms, its large economy with robust growth and strong support from bilateral and multilateral partners.

“The ratings remain constrained by weak external liquidity metrics amid still substantial reliance on non-resident investments in the local bond market, large fiscal deficits, high general government debt/GDP, and domestic and regional security and political risks,” it noted.

In February, Moody's credit rating agency maintained its rating for the Egyptian banking sector at B2, with a stable outlook. The B2 rating is the 14th rating out of Moody's 18 ratings, from highest to lowest.

The agency said that continued investments in infrastructure and spending will support economic growth in Egypt, and financial inclusion initiatives will provide good opportunities for banks.

Moody's expects the Egyptian economy to grow 5.5 percent in the current fiscal year 2021-2022.

Moody's warned that non-performing loans will rise with the decline in support measures to counter the effects of the pandemic, but it believes that loan growth will make the non-performing loan ratio stabilize at 4 percent.

Moody's emphasized that operating conditions will support banking activities, as infrastructure investments, a recovery in tourism and strong household spending backed by remittances from abroad will help drive 5.5 percent GDP growth for the current and next fiscal years.

Also, in August, S&P Global Ratings also affirmed Egypt’s credit rating in both local and foreign currencies at ‘B’ with a stable look for the fourth time in a row since the commence of the pandemic.