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.

He added that the government would implement a package of financial, monetary and structural measures to deal with concerns related to the high external financing needs of the Egyptian economy.

Moreover, the minister said the government is keen to implement the structural reforms, especially its programme of offering stakes in state-owned enterprises, which according to S&P Global Ratings, could result in a steady inflow of foreign currency.

Maait highlighted the country’s increase in inflows of foreign currency amid a strong performance of petroleum export revenues, especially from natural gas, which recently reached $700 million per month. The government approved a plan in August 2022 to ration electricity to save natural gas for export to generate foreign currency.

He also noted that non-oil exports increased by 29 percent and that Suez Canal revenues increased to $7 billion last year and are expected to reach more than $8 billion in 2023, in addition to the growth of tourism revenues.

The minister revealed that expats remittances reached $33 billion last year and that foreign direct investment increased by 71 percent to reach $9.1 billion in 2022 up from $5.2 billion the year before.

Egypt has been suffering from a shortage of foreign currency over the past months and a hike in the prices of basic commodities amid soaring inflation due to the Ukraine war, causing the country to increase interest rates by 1000 basis points and depreciate the pound three times since March 2022.