Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Moody's Affirms Egypt's Outlook at B2 with Negative Outlook


Fri 27 May 2022 | 05:22 PM
Taarek Refaat

Moody's credit rating agency has kept its classification to Egypt at B2, but it changed its future outlook from stable to negative.

Moody's said that the negative outlook reflects the increasing side risks of Egypt's ability to absorb external shocks.

The credit rating agency added that the strict global financing conditions increase the risk of poor cash flows compared to the current "Moody's" expectations to support Egypt's external outlook.

However, "Moody's pointed out that Egypt's strong trend towards GDP growth supports economic flexibility and the possibility of attracting foreign direct investments (FDI).

Moody's had confirmed earlier, the future outlook of the banking sector in Egypt. It pointed out that the continued flow of investments in the infrastructure, and the strong increase in spending rates, will support economic growth, while financial inclusion initiatives provide abundant commercial opportunities for banks.

It added that the prosperity of the economy and the deepening of financial inclusion will provide huge opportunities for the growth of the loan portfolio to banks quickly and reduce the allocations of loan losses, this will lead to a slightly high profit, despite the high operating costs and the increase in taxes.

"Egypt's long-term foreign- and local-currency issuer ratings at B2 and. It also affirmed Egypt's foreign-currency senior unsecured ratings at B2, and its foreign-currency senior unsecured MTN program rating at (P)B2."

"The B2 rating remains supported by the government's pro-active crisis response and track record of economic and fiscal reform implementation over the past six years. Egypt's broad and dedicated domestic funding base helps weather tightening financing conditions. Egypt's strong trend GDP growth supports economic resiliency and the prospect of attracting foreign direct investments in line with the government's privatization strategy."