S&P lowered outlook on Egypt due to external pressures on economy: Finance minister

The American credit rating agency S&P Global Ratings affirmed on Friday its B/B long and short-term foreign and local currency credit ratings for Egypt, but they revised their outlook on the country from stable to negative.

In a statement published on the cabinet’s Facebook page, Maait explained that the war in Ukraine caused negative global economic repercussions, resulting in unprecedented inflation hitting the local economy.

“The negative outlook reflects risks that the policy measures implemented by Egyptian authorities may be insufficient to stabilise the exchange rate and attract foreign currency inflows to meet the Sovereign Fund’s high external financing needs,” S&P Global Ratings said in a report.

The agency added that Egypt requires high external financing of around $17 billion in the current fiscal year and $20 billion in the coming fiscal year 2023/2024.

However, S&P Global Ratings could improve Egypt's credit rating in the coming period if it finds the country capable of meeting its foreign currency financing needs through exchange rate flexibility and attracting large inflows of foreign currency through its offering programme.

“We are proceeding with the implementation of the economic reform programme supported by the IMF,” Maait stressed.