Standard and Poor’s (S&P) has maintained for the second time in six months Egypt’s credit rating in domestic and hard currencies at B level and kept its stable outlook.
S&P expects Egypt to attain positive economic growth of 2.5 percent in FY2020/2021, projecting it to go up to 5.4 percent by 2022 despite the ongoing challenges imposed by the Covid-19 pandemic.
Egypt’s Minister of Finance Mohamed Maait said that the action reflects the confidence of international institutions, especially credit rating corporations, in Egypt’s economy to deal adequately with the Covid-19 crisis. Maait added the economic, monetary and fiscal reforms Egypt adopted since November 2016, supported by the public, helped strengthen the economy to cope with ongoing challenges.
Maait said that the S&P report on Egypt’s economic activity praised the country's corporate mechanism and its rapid response and efficiency regarding the Covid-19 crisis. He emphasised that Egypt is in a better position compared to other countries with the same credit rating.
Deputy Minister of Finance for Financial Policies Ahmed Kojok said that S&P expected Egypt’s economic, monetary and fiscal indices to retain their positive outlook in the short run. Kojok added that Egypt’s real growth stands at around five percent over the medium term, in addition to achieving a sustainable initial surplus to GDP ratio at two percent as of the current FY2020/2021 in light of the pre-emptive procedures package the government adopted since the onset of the coronavirus pandemic.
“S&P experts praised Egypt’s government ability to attain an initial surplus to GDP ratio at 1.8 percent in FY2019/2020 despite the harsh implications of the pandemic on the country’s economy and on the whole global economy,” Kojok said.
In its updated report on the economic outlook of the Middle East and Central Asia (MCD) region, released in October, the International Monetary Fund (IMF) said that Egypt is the only country in the Middle East to see positive growth in 2020.
The report projected Egypt’s real GDP, as an oil importer in the Middle East and North Africa region, to achieve positive growth at 3.5 percent in 2020, down from 5.6 percent in 2019, and to continue to drop in 2021 to reach 2.8 percent in 2021.
Yet, the updated IMF estimation of Egypt’s growth has raised its expectation from two percent growth in 2020, projected in April and June, to 3.5 percent.
In terms of inflation, the report expected the inflation rate for consumer prices to be 5.7 percent in 2020 and to reach 6.2 percent over 2021.