The Egyptian government is providing financial support to the groups most affected by the current inflationary pressures.
Egypt takes measures to address foreign financing needs amid S&P's outlook - File Photo
Egypt's credit rating has been maintained by Standard & Poor's (S&P) at "B" for both local and foreign currencies, however, the outlook has been revised from stable to negative due to pressures from external transactions.
Egypt's economy has been subject to significant external pressures, including the aftermath of the war in Europe and its negative global economic effects, including an unprecedented inflationary wave.
The Egyptian government is providing financial support to the groups most affected by the current inflationary pressures, according to Dr. Mohamed Maait, the Minister of Finance.
The Minister stated that the government is continuing to implement the economic reform program supported by the International Monetary Fund, and that it will apply a package of financial, monetary, and structural measures to address concerns related to the increase in foreign financing needs for the Egyptian economy. S&P estimated that these needs will be around $17 billion during the current fiscal year and $20 billion during the next fiscal year of 2023/2024.
The Minister added that the Egyptian government is keen to implement the structural reforms announced in December 2022, particularly those related to the IPO program and attracting more foreign direct investment, while completing fiscal control policies.
According to the report, S&P expects the average annual economic growth rate to reach 4% over the next three years, driven by the construction, energy, information technology and communications, wholesale and retail trade, manufacturing, agriculture, and health sectors.
The Minister also noted that S&P highlighted the continuation of financial discipline, which was reflected in the improvement in the primary fiscal balance and the decline in the debt-to-GDP ratio, reaching 83% by the end of 2022, compared to 96% in 2017.
This decision by S&P came amid several positive economic developments in Egypt, including a significant improvement in the tourism sector, which saw a 60% increase in revenue during the first quarter of 2023 compared to the same period last year. Additionally, Egypt's gross domestic product (GDP) grew by 5.2% in the first quarter of 2023, according to the Central Bank of Egypt, indicating the country's ability to withstand external pressures and implement effective policies to support economic growth.
