RIYADH: Egypt’s credit rating was raised by S&P Global to ‘B’ from ‘B-’, while Fitch reaffirmed its ‘B’ rating, citing reform progress and macroeconomic stability.
S&P said the upgrade reflects reforms implemented over the past 18 months, including the liberalization of the foreign exchange regime, which boosted competitiveness and fueled a rebound in growth.
In September, Egypt’s Ministry of Planning, Economic Development and International Cooperation reported that the economy expanded 4.4 percent in fiscal year 2024/25, driven by a strong fourth quarter when gross domestic product growth hit a three-year high of 5 percent.
Welcoming the move, Egypt’s Prime Minister Mostafa Madbouly said: “Both S&P and Fitch have confidence, despite all challenges, that the Egyptian government will continue implementing its economic reform program, and that the returns from this program will grow further in the coming period.”
According to S&P, economic reforms in the country have also boosted tourism and inward remittances and improved external and fiscal metrics.
Since March 2024, the Egyptian pound has traded under a more flexible regime, helping stabilize the balance of payments and restore investor confidence.
“The stable outlook balances our view of Egypt’s improving growth prospects and improving balance of payments trends against continued high government deficits and debt, including external commercial obligations,” said S&P Global.
The agency said Egypt’s economy has benefited from the $8 billion loan program provided by the International Monetary Fund in March 2024, which helped stabilize the currency and support policy reforms. It also noted more than $10 billion in additional funding from other multilateral donors.
“The government’s reform efforts, supported by the IMF, have attempted to reduce key structural constraints to growth. These include the large informal sector; relatively weak, albeit improving, governance and transparency of state-owned enterprises; and barriers to competition that prioritized public and military-owned companies and restricted private-sector activity,” said the report.
In March 2024, the EU announced a €7.4 billion ($8.1 billion) financial and investment package for Egypt over four years, comprising about €5 billion in concessional loans, €1.8 billion in investments, and €600 million for bilateral projects.
S&P Global said it could consider raising Egypt’s credit rating if the country’s net government and external debt positions improve significantly faster than currently expected.
The ratings could also be upgraded further if economic diversification progresses steadily and the government opens key sectors to foreign investment, thereby benefiting the broader economy.
On the downside, S&P Global warned that it could revise Egypt’s outlook to negative if the government’s commitment to macroeconomic reforms — including exchange rate flexibility — weakens, or if economic imbalances such as foreign currency shortages reemerge.
In a separate report, Fitch Ratings affirmed Egypt’s Long-Term Foreign-Currency Issuer Default Rating at ‘B’ with a stable outlook, citing the country’s large economy, relatively high potential GDP growth, and strong support from bilateral and multilateral partners.
However, Fitch noted that these strengths are offset by weak public finances, including exceptionally high debt interest-to-revenue ratios, sizable external financing needs, a record of volatile commercial financing flows, elevated inflation, and geopolitical risks.
According to Fitch, Egypt’s gross international reserves rose by $2.1 billion in the first nine months of 2025 to reach $47 billion.
The Central Bank of Egypt’s net foreign asset position stood at $10.7 billion in August, remaining broadly stable this year, while the banking sector’s net foreign asset position improved by $13.7 billion during the first eight months of 2025.
“Our projection for broad stability in external finances partly reflects a steady narrowing of the current account deficit to 2.8 percent of GDP in FY27, following the 1.2 percentage points improvement in FY25 to 4.2 percent of GDP. This is driven by robust expansion of remittances which surged 66 percent in FY25 and tourism, offsetting a widening trade deficit,” said Fitch.
The report further noted that Egypt’s foreign direct investment is expected to rise to an average of $15.5 billion in FY2026–2027, up from $13.2 billion in FY2025.
According to Fitch, the country’s rating could be upgraded if Egypt strengthens its international reserves, narrows its current account deficit, and implements structural reforms that reduce the risk of renewed imbalances while improving access to international markets.
Conversely, the rating could be downgraded if a further escalation of regional conflict heightens instability and security risks in Egypt, resulting in larger negative spillovers for tourism, Suez Canal revenues, or investor sentiment.
