Megaprojects and Billions of Dollars Knock on Egypt's Door

Megaprojects and Billions of Dollars Knock on Egypt's Door

Standard & Poor's Raises Egypt's Rating to 'B', Fitch Confirms

Standard & Poor's upgraded Egypt's credit rating by one notch to 'B' from 'B-' on Friday, citing ongoing reforms that have led to a sharp rebound in GDP growth. Fitch affirmed its credit rating in light of the country's moderately high growth potential and strong support from partners.

Fitch last upgraded Egypt's rating to 'B' in November 2024, when foreign investment and tighter monetary conditions helped build stronger fiscal space. S&P's upgrade to 'B' is the first since Egypt began receiving financial support around March 2024.

Egypt's annual inflation rate declined from a record high of 38 percent in September 2023, following an $8 billion program agreement with the International Monetary Fund in March. "Given the stronger GDP growth prospects and increased revenues, coupled with spending restraint and primary surplus targets associated with the IMF program, we expect fiscal consolidation to continue, albeit at a gradual pace," Standard & Poor's said in a statement.

Standard & Poor's said that, in addition to the IMF program, the commitment to a market-determined exchange rate should continue to support Egypt's GDP growth prospects and fiscal consolidation efforts over fiscal years 2025-2028. In the April-June 2025 quarter, tourism receipts in Egypt rose by 20 percent, indicating a strong recovery from the impact of the COVID-19 pandemic, while remittances from Egyptians abroad, another key source of foreign currency, rose by 36.5 percent.

According to Standard & Poor's, the reforms implemented by the authorities over the past 18 months, including the liberalization of the foreign exchange regime, have led to a sharp rebound in Egypt's GDP growth and boosted tourism and remittances. Standard & Poor's and Fitch maintained their outlook on Egypt at "stable." Moody's maintained Egypt's rating at "Caa1" since October 2023, although it revised its outlook to "positive" from "negative" in March 2024, following significant bilateral support and policy changes.