Fitch keeps Egypt’s rating at B with stable outlook

CAIRO – 22 June 2017: International rating agency Fitch Ratings affirmed Egypt’s long-term foreign and local currency default rating (IDRs) at “B” with stable outlook, it announced Thursday.

Commenting on the economic measures in Egypt, Fitch said Egypt might be under pressure to increase spending on social programs as it expects inflation to be near 20 percent for the rest of 2017, and to decline to an average of 13.5 percent in 2018.

“Fiscal and monetary reforms continue to present some risk of social backlash, especially given ongoing structural problems including high youth unemployment, deficiencies in governance and the business environment, as well as intermittent security issues,” the rating agency noted.

Forecasting a higher than expected budget deficit for Egypt, Fitch said weak currency exchange rates will contribute in pushing government debt to 93 percent in 2018 and 87.9 percent in 2019.

Fitch forecasts GDP growth to hit 4.5 percent in 2018 due to a stabilizing exchange rate and production from the Zohr gas field.