S&P holds Egypt's sovereign credit ratings with stable outlook

CAIRO – 12 May 2017: Standard and Poors (S&P) Global Ratings affirmed Friday Egypt's long- and short-term foreign and local currency sovereign credit ratings at 'B-/B', with a stable outlook.

"We anticipate ongoing fiscal consolidation in Egypt over 2017-2020, supported by the three-year IMF program. We are therefore affirming our 'B-' long-term and 'B' short-term ratings on Egypt," the agency said in a Friday report.

It added that "the stable outlook balances the risks arising from Egypt's large external and fiscal deficits, against financing support from the IMF program and gradual reform implementation to address structural imbalances."

According to S&P's estimates, Egypt's real GDP is projected to grow at a moderate rate of just under 4 percent on average over 2017/2020, largely boosted by investments and net exports.

Meanwhile, the agency expects other factors to weigh on the economy in the near term, namely "the planned fiscal consolidation with the second round of subsidy cuts in 2017/2018, the tight monetary stance, and the slow growth in private demand due to high inflation."