• Egypt is one of the very few emerging economies that experienced a positive economic growth in 2020 due to the government’s timely response to the Covid-19 shock and a short period of economic lockdown.
• Egypt’s overall budget deficit is significantly narrowing to 6.8% from 7% in 2020, its economy is expected to achieve an average growth rate of at least 5.5%, primary surplus is expected to reach 1.5% and the overall budget deficit to declining to 7.4% of GDP from 8%. Public debt is expected at 86% of GDP compared to the previously forecasted 91%. Thus, Egypt’s economic growth figures are exceeding expectations, the country current account position is improving to reduce its financing needs and the economic reform program has led to a significant reduction in government debt.
• All the three international rating agencies have acknowledged in their current year’s reviews that Egypt’s economy has demonstrated “stability and resilience”, through the global Covid-19 crisis.
• Egypt’s economic, financial and structural reforms have conspicuously provided a strong and diversified domestic financial base and high foreign exchange reserves amounting to US$39 billion in 2020, rising from US$15 billion in 2015.
• Egypt is the only African country that managed to issue a US$5 billion Eurobond, its biggest issue in history, at substantially fair yields, during the peak of Covid-19 in May 2020, when all other African countries were priced out of the volatile global financial markets.
• Egypt’s has lifted its state of emergency, which will unlock the country’s tourism sector and other foreign exchange sources.
• The country rolled out a rigorous’ vaccination campaign to vaccinate 40% of the population by the end of 2021, issuing a vaccine mandate for all civil servants and the public who wish to access government buildings.

Based on these factors, the APRM views that it would be prudent for the Government of Egypt’s current long-term foreign currency sovereign credit ratings by Moody’s and S&P Global to be upgraded to, at least, a BB- rating class to reflect the country’s current creditworthiness. A rating upgrade will translate into a significant decline in the cost of servicing government debt and further stimulate the economic fundamentals in Egypt. In view of the above, the APRM, together with the government of the Arab Republic of Egypt, will engage the Moody’s and S&P on the newly affirmed credit rating with aim of attaining a rating upgrade in the upcoming review.

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