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Investing.com -- S&P Global Ratings has upgraded Egypt’s long-term sovereign credit rating to ’B’ from ’B-’ while maintaining a stable outlook, citing benefits from the country’s shift to a flexible exchange rate policy.
The rating agency affirmed Egypt’s short-term sovereign credit rating at ’B’ and raised its transfer and convertibility assessment to ’B’ from ’B-’, according to its announcement on Friday.
Egypt’s move to a more flexible exchange rate has led to higher economic growth, increased tourism revenue, and greater remittance inflows, S&P noted. The country has also seen improvements in net financial inflows, strengthening its external economic position.
The Egyptian government achieved a primary surplus of 3.5% of GDP for fiscal year 2025, which ended June 30. Despite this positive development, S&P identified the reduction of high interest payments while extending the average maturity of domestic debt as key challenges for the country’s public finances.
The stable outlook reflects a balance between Egypt’s improving growth prospects and balance of payments trends against its continued high government deficits and debt, including external commercial obligations.
S&P warned it could revise the outlook to negative if the government’s commitment to macroeconomic reform weakens or if economic imbalances such as foreign currency shortages increase. The rating could also face downward pressure if high interest costs lead to a distressed debt exchange, or if geopolitical and tariff-related tensions affect Egypt’s external market access.
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