Moody's affirms Egypt’s B3 rating, maintains stable outlook

CAIRO - 21 July 2017: Moody's Investors Service, "Moody's, on Thursday affirmed Egypt's B3 rating and said the outlook remains stable.

In its ranking report, Moody’s said the International Monetary Fund (IMF) review of Egypt’s Economic Reform Program is credit positive indicating the current account deficit to shrink gradually to 3 percent of GDP by the end of 2020.

The ranking comes after the IMF's Executive Board completed the first review of Egypt’s economic reform program supported by an arrangement under the Extended Fund Facility (EFF).

Following the review, the fund approved the disbursement of the second tranche worth $1.25 billion of Egypt's $12 billion loan.

The report indicates the progress in implementing reforms will help reduce the nation’s fiscal and external vulnerabilities.

The Central Bank of Egypt’s (CBE) net foreign reserves amounted to $31.3 billion by the end of June compared to $17.5 billion a year earlier, as a result for the Egyptian pound flotation and higher foreign investment.

“We forecast a gradual narrowing of Egypt’s general government fiscal deficit to about 9.5 percent of GDP by the end of this fiscal year from around 11 percent in fiscal 2017, and an improvement in the debt/GDP ratio to 86.5 percent from 95 percent over the same period,” according to Moody’s.