Standard & Poor’s (S&P), a major global credit rating agency, has changed Egypt’s credit outlook from negative to stable and affirmed its long-term and short-term foreign and local currency sovereign credit ratings for Egypt at B-/B.
The revision recognizes Egypt’s progress on economic reforms amid persistent challenges from global financial volatility.
S&P acknowledged Egypt’s persistent challenges, such as high inflation, a substantial debt burden, and heavy dependence on external financing. However, the agency highlighted that recent steps, including a managed currency devaluation, tighter monetary policy, and acceleration of the privatization program, have contributed to improved investor sentiment and a more stable macroeconomic environment.
The stable outlook suggests that S&P expects Egypt to maintain sufficient access to external financing and to continue implementing structural reforms, especially under the framework of its IMF program. Any delays in reforms, renewed foreign exchange pressures, or deterioration in external liquidity could prompt negative rating actions in the future, the agency warned.
As one of the leading global credit rating agencies, S&P plays a crucial role in evaluating a country’s financial stability. Its ratings are closely watched by investors and financial institutions, shaping borrowing costs and guiding investment decisions. A stable outlook indicates that, although economic risks persist, the country’s financial position is not expected to worsen in the short term.
The revised outlook reflects S&P’s expectation that Egypt’s economic and financial reforms, combined with significant foreign investment commitments, will help reduce external and fiscal pressures over the next 12 months.
Egypt recently secured an expanded loan agreement with the International Monetary Fund (IMF), increasing its total support to USD 8 billion (EGP 410 billion). Additionally, Egypt also secured substantial foreign direct investment (FDI) agreements, including a landmark USD 35 billion (EGP 1.8 trillion) investment deal with the United Arab Emirates, aimed at developing the Ras El Hekma region.
