Standard & Poor's affirmed Egypt's credit rating with a stable outlook

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Standard & Poor's Global Ratings has affirmed Egypt's sovereign credit rating at "B" for both foreign and local currencies, in the long and short term, while maintaining a stable outlook.

The agency explained that the stable outlook reflects the balance between Egypt’s economic growth prospects in the medium term, the continued momentum of reforms, and the risks associated with the continuation of the conflict in the Middle East.

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Standard & Poor's said that the proactive measures taken by the Egyptian authorities helped alleviate the immediate pressures resulting from the conflict.

It indicated that outflows from foreign portfolio investments amounted to $9.5 billion in the months following its outbreak on February 28, 2026, while the Egyptian pound declined by up to 15% against the US dollar.

She added that the rapid and comprehensive response contributed to stabilizing the markets and reversing a large part of the exchange rate fluctuations, supported by continued commitment to exchange rate flexibility, energy rationalization measures, and adjusting fuel and electricity prices in conjunction with providing targeted social support.

The agency indicated that Egypt achieved a primary surplus of 4.9% of GDP during the fiscal year 2026 ending on June 30, exceeding the targets set by the International Monetary Fund.

She stressed that the Egyptian authorities renewed their commitment to the reform agenda supported by the Fund, which includes enhancing local revenues and implementing structural reforms to accelerate privatization and reduce the state’s role in the economy.

The agency warned that a decline in the government's commitment to structural reforms, including exchange rate flexibility, or a widening shortage of foreign currencies, may prompt it to lower Egypt's credit rating.

It also indicated that continued high interest costs and increased pressures on public finances, or a decline in Egypt’s ability to access foreign markets due to geopolitical tensions, may lead to a negative rating action.

On the other hand, Standard & Poor's explained that the acceleration of improvement in government and external debt conditions, or the increase in foreign direct investment, including through the sale of state assets, may support raising the credit rating. Policies to diversify the economy and open key sectors to foreign investment can also contribute to improving Egypt's credit rating.