Moody’s downward revision for Egypt ignores gov’t efforts: Finance minister
On Thursday, Moody's revised its outlook on Egypt to "negative" from "stable" citing “increasing risks that the country's credit profile will continue to weaken amid difficult macroeconomic and exchange rate rebalancing.”
In a statement on Friday, Maait said the country’s government has adopted a “flexible and balanced” manner to manage macroeconomic risks, absorb successive external shocks, and deal with the negative effects resulting from geopolitical tensions affecting economic activity.
The government is also keen to meet the basic needs of citizens and expand social protection networks while adhering to financial discipline, he added.
This approach, he explained, allowed the government to record an initial surplus of EGP 150 billion (about $4.8 billion) during the first half of the current fiscal year 2023/2024 (from July to last December), compared to EGP 25 billion for the same period last fiscal year.
The finance minister spotlighted the nation’s ability – under its Initial Public Offering (IPO) programme – to meet its financing needs over the coming two years, attract more investment and therefore reduce the need for external financing.
The government has already withdrawn from economic activities worth $3.5 billion under the IPO scheme, the finance minister said, noting that the government can access about $5 billion in financing on concessional terms from multilateral development banks.
“This reflects the confidence of these international institutions in the economic path pursued by the Egyptian government through financial policies more capable of achieving financial discipline and maintaining a sustainable primary surplus, along with continuing to implement structural reforms that enhance economic growth by making more room for the private sector,” Maait was quoted as saying.
Maait said the government has already identified sources to meet the external financing requirements of the state's general budget until the end of the current fiscal year, which is estimated to be $4 billion.