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Egypt Receives Best Credit Rating in 7 Yrs

Egypt Receives Best Credit Rating in 7 Yrs

Sunday, 2 September, 2018 - 11:45
Asharq Al-Awsat
Cairo - Asharq Al-Awsat
Egypt’s Minister of Planning, Monitoring and Administrative Reform Hala al-Saeed announced on Saturday that Moody’s credit outlook rating for the Egyptian economy has changed from stable to positive, ranked as ‘B3’.

The credit rating has been the best since 2011, when Egypt received a “Ba2” ranking, reflecting that Egypt will be able to pay back liabilities, she said.

Moody's changed the outlook on Egypt's long-term issuer ratings to positive from stable on its report issued on August 28 and has affirmed the B3 issuer ratings.

Its decision to change the outlook to positive reflects the continuing structural improvements in the fiscal and current account balances, resulting from the ongoing implementation of the home-grown IMF-backed reform program.

In a press conference on Saturday, Saeed attributed the growing confidence of the international community in the Egyptian economy to the structural reforms carried out by the government in the framework of implementing the country’s Economic and Social Reform Program, which has positively affected all economic indicators.

She explained that the Egyptian economy has achieved the highest annual growth rate in ten years, at 5.3 percent during the fiscal year 2017-2018.

Investment and net external demand contributed 75 percent of this growth, and all economic activities achieved positive growth rates for the first time in 10 years since the fiscal year 2007-2008.

The unemployment rate declined to 9.9 percent 2017/18 within the fourth quarter of fiscal year 2017/18 in line with the increase in the economic growth by 5.4 percent.

The Purchasing Managers Index increased by eight percent and the state budget’s total deficit declined to 9.8 percent of the Growth Domestic Product (GDP), Saeed announced.

The Minister pointed out that according to Moody's, Egypt’s economic growth is expected to continue improving in the coming years in the light of the continued development of the business environment.

This is due to the effective implementation of the new investment and bankruptcy laws, the development of industrial land allocation mechanism and the continuation of infrastructure development efforts in light of the implementation of major national projects, especially the new administrative capital project.

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