Egypt economy improving, but large financing needs still challenge

Egypt’s public finances and economic conditions have improved thanks to reforms, but the government’s large financing needs remain a “key challenge,” global rating agency Moody’s Investors Service said in a Tuesday report.

Structural economic issues such as high unemployment and inflation, and elevated political risks, are also among the challenges Egypt faces, it added.

“We expect that the economic and fiscal reform momentum in Egypt will help fiscal deficits and government debt levels to gradually reduce, although government financing needs remain relatively large” said Moody’s Vice President and Senior Analyst Steffen Dyck.

Moody’s said Egypt’s economy is projected to grow by five percent for the current fiscal year 2015-2016 (to end June 30,) up from an expected 4.5 percent in the previous fiscal year.