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What does Standard & Poor's decision to maintain Egypt's "B" credit rating mean?


Standard & Poor's has kept the credit rating of Egypt in both local and foreign currencies unchanged at the level of "B", while also maintaining the stable outlook for the Egyptian economy, "Stable Outlook", for the third time in a row since the beginning of the Corona crisis, which reflects the continuing confidence International institutions and credit rating institutions in the resilience of the Egyptian economy and its ability to positively and flexibly deal with the repercussions of the "pandemic", compared to countries with similar or higher credit ratings, at a time when economic conditions deteriorated in most of the peer and emerging countries.


What is the consequence of the institution’s report for the benefit of the Egyptian economy?

 The Egyptian economy, according to Standard & Poor's estimates, can overcome the negative repercussions resulting from the pandemic due to the improvement of major economic indicators such as the stability of public financial conditions, the presence of a large and reassuring foreign exchange reserve, in addition to the government's continuing implementation of financial, economic and structural reforms that would improve Business operating environment and ensuring the sustainability of economic indicators conditions.


 How many times has the global institution kept the economy stable?

 The decision of Standard & Poor's Corporation to maintain Egypt's credit rating for the third time in a row since the beginning of the pandemic and for the first time since the beginning of 2021 reflects the continued balance of confidence generated by analysts in it due to the large economic and financial reforms implemented during the past years, which gave sufficient flexibility. For the Egyptian economy to finance its needs in both local and foreign currencies, despite the recent deterioration of the global economic and financial conditions, according to statements by Mohamed Maait, Minister of Finance.


What are the reasons for maintaining that stable view of the Standard & Poor's?

As a result of the balance of economic and financial policies pursued by the government and the Ministry of Finance during the past years and during the period of dealing with the pandemic; This contributed to the Egyptian economy being one of the very limited economies in the world that achieved growth and improvement in unemployment rates during the year 2020, as the Egyptian economy recorded a growth rate of 3.6% during the fiscal year 2019/2020 and is expected to achieve 2.8% during the year The current fiscal year, as a result of the positive and high contribution of several sectors.


What are the Corporation's expectations for the size of government investments?

 Standard & Poor's Corporation expects in its latest report a strong positive contribution to government and private investments, which will contribute to achieving sustainable growth rates of about 5.3% in the medium term during the period (2022-2024), in addition to the positive impact generated by the continued improvement of the business climate. Due to the implementation of a package of structural reforms.


What is the relationship of the government's efforts to obtain a stable rating?

 Standard & Poor's Corporation expects an improvement in the growth prospects of the Egyptian economy due to the government's commitment to the path of economic, financial and structural reforms. It also expects the gradual improvement of most economic and financial indicators in the medium term, including the return of government debt rates to decline as a percentage of the GDP and the improvement and decrease in the burden of the debt service bill due to The continuation of achieving a first surplus of 2% of GDP in the coming years as a result of the efforts of the Ministry of Finance to extend the life of the debt to reach 3.2 years during 2020 and about 3.6 years by the end of June 2021, in light of the low local interest rates.


 What are the most prominent points of praise from the Foundation for the Egyptian economy?

 The Standard & Poor's Corporation praised the government's efforts in targeting the reduction of the public budget deficit during the fiscal year 2021/2022 to 6.7% of the GDP, down from 7.8% of the GDP as a target for the current fiscal year. It also addressed positively many measures taken by the government to preserve Stability of financial, economic and social conditions, such as efforts to rationalize spending, increase allocations to the health and education sectors, financing directed at social protection programs such as “solidarity and dignity” and increase cash transfers to the most needy groups, in addition to efforts to support exporters. The report also discussed the measures that the government has taken and is targeting to develop government resources and revenues. In a way that contributes to achieving an increase in the percentage of tax revenues to the domestic product at a rate of 5% annually during the next three years by broadening the tax base in general.


The report of the Standard & Poor's Corporation, according to the statements of Ahmed Kogok, Deputy Minister for Financial Policy, praised the existence of a broad and strong domestic financing base, and a reassuring balance of foreign exchange reserves, which are elements that represent a source of strength and solidity for the Egyptian economy, stressing that the most important factors that may lead to raising the rating Credit to Egypt in the medium term is the continuation of financial control efforts and the continued reduction of the path and rates of government debt to the domestic product, which contributes to reducing the financing needs of the Egyptian economy and achieving high and good economic growth rates.

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