Fitch: Egypt’s Economic Growth Outperformed Vast Majority of World Countries

Fitch: Egypt’s Economic Growth Outperformed Vast Majority of World Countries

Fitch Ratings has affirmed Egypt’s long-term foreign-currency Issuer Default Rating (IDR) at 'B+' with a stable outlook.

The agency said Egypt's economic growth outperformed the vast majority of Fitch-rated sovereigns throughout the coronavirus pandemic.

The ratings are supported by resilient domestic demand, gas production and a public-sector investment program, in the face of sagging tourism and export-oriented sectors, it explained.

Real GDP grew 3.3 percent in fiscal year (FY) 2021, down from 3.6 percent in FY20 and 5.6 percent in FY19.

Global economic recovery and resumption of tourism to Egypt, helped by the end of a six-year ban on Russian flights to Egypt's Red Sea resorts, will drive an increase to 5.5 percent growth in FY22-FY23.

The ratings are also supported by Cairo’s recent record of fiscal and economic reforms, which the authorities are continuing, as well as its large economy, which has demonstrated stability and resilience through the global health crisis, the agency affirmed.

“The ratings are constrained by still-large fiscal deficits, high general government debt/GDP and domestic and regional security and political risks, in addition to the external vulnerabilities, including the reliance on short-term portfolio inflows.”

Continued economic growth and a modest coronavirus support package limited the pandemic's impact on Egypt's public finances, the agency