Fitch Raises Egypt's Credit Rating to B from B- with Stable Outlook

Fitch Ratings agency raised Egypt's credit rating to B from B- with a stable outlook. noting the decline in risk and improvement in the external position of the Egyptian economy after Ras Al-Hikma deal, which led to an improvement in the country's investment flows.

The agency pointed out that it is possible to raise the credit rating again to "B+" or amend the future outlook from stable to positive if the degree of external risks to the Egyptian economy continues to decline.

It noted, in a report, the completion of financial discipline procedures and the achievement of a large primary surplus of 6.1% and a total deficit of 3.6% of GDP, indicating the efforts of the Ministry of Finance to complete the improvement of the country's financial situation.

It pointed out that foreign exchange reserves increased by $11.4 billion during the first 9 months of 2024, reaching $44.5 billion, with a noticeable improvement in net foreign assets in the banking sector, explaining the existence of strong financial support from some international financial institutions, including the International Monetary Fund (IMF), and the signing of the European Union (EU) agreement, amid expectations of new investment flows from some countries such as Saudi Arabia.

The report confirmed that applying a flexible exchange rate led to eliminating the parallel market and restoring the overall economic balance, noting its expectations of a decline in inflation during the coming period after slowing from 26.4% in September to 12.5% ​​by the end of the current fiscal year, after reaching 35.7% in February 2024.

It explained that setting a ceiling for public investments at EGP1 trillion, and expanding the concept of general government by including 59 economic entities in the state's general budget contributes to raising the efficiency of public spending and achieving financial targets for the current fiscal year.