According to the report, this outlook has been in place since March 2024 and indicates the potential for improved fiscal and external conditions.
The report attributes this to recent measures Egypt took, including currency devaluation and improved foreign exchange reserves.
It said these measures have strengthened the country's capacity to manage debt obligations and decreased borrowing costs.
Thge report added that the government targets a primary surplus of 3.5 percent of GDP through subsidy reforms and enhanced tax revenues to stabilize the economy and improve debt affordability.
Despite positive trends, the report continued, Egypt's high debt levels and significant domestic and external financing needs present ongoing risks.
It clarified that the economy remains susceptible to external shocks, which could challenge the government's commitment to a flexible exchange rate regime.
In addition, Moody’s report stated that the country faces serious environmental challenges, including water scarcity and pollution, exacerbated by climate change.
It added that the government has taken initiatives to address these issues, including investment in desalination and stricter agricultural practices.
Moreover, economic pressures, particularly following the Russian-Ukrainian war, have led to rising prices and diminished purchasing power.
The report also highlighted that the government is working on social safety nets to mitigate these impacts.
Factors for upgrade, downgrade
Per the report, a sustained increase in foreign direct investment and improved debt affordability could lead to a higher rating.
Conversely, potential capital outflows or failure to enhance debt metrics could negatively impact ratings.
Short link: