Moody's Upgrades Egypt's Credit Rating to 'B3' with Positive Outlook
Moody's upgraded Egypt's credit rating to B3 with a positive outlook, driven by efforts to consolidate public finances and implement structural reforms, anticipating a faster reduction in debt burdens.
Translated by Qiyas from الجريدة — Original source
Days after the decisions by Fitch and Standard & Poor’s, Moody’s Investors Service upgraded Egypt’s credit rating to “B3” from “C-CA-A1,” while maintaining a positive outlook, driven by efforts to stabilize public finances and structural reforms implemented by the state.
The agency stated that the positive outlook is based on the likelihood of accelerating the pace of debt burden and interest reduction faster than its baseline expectations, anticipating that the Egyptian government will continue fiscal consolidation measures after the current program with the International Monetary Fund (IMF) concludes in December next year.
Egypt has faced the risk of a debt crisis for years, being among the countries receiving the largest assistance programs from the IMF, with a total value of approximately $8 billion.
These loans include measures that the Egyptian government has committed to implementing, particularly to strengthen public finances and ensure public debt sustainability, as well as to reduce the state’s and military’s weight in the economy.
These “structural reforms” and fiscal consolidation measures are precisely what Moody’s cited to justify its decision, considering that they have placed public debt and its interest burden on a downward trajectory, albeit still at high levels.
Egypt has notably implemented measures to scale back food subsidies, which were deemed broader than necessary, while inflation is expected to exceed 13 percent annually this year, after surpassing 33 percent in 2025.
In a statement, Moody’s praised “increased revenue collection and spending rationalization” as factors supporting progress, and estimated that “the transition to a flexible exchange rate and a tighter monetary policy have enhanced the economy’s capacity to absorb shocks.”
However, the credit rating agency noted that “a decline in the government’s commitment to fiscal discipline and limited progress could exert negative pressure on the credit rating.”
Nevertheless, it justified its current positive outlook by stating that continuing reforms would allow for a faster reduction in debt than initially projected in its baseline estimates.
On Tuesday, the IMF published its report on global economic outlooks for the current and next year, forecasting that the Egyptian economy will grow by 5.1 percent this year and by 4.7 percent in 2027.
The IMF also predicted a slight rise in the inflation rate in 2027 to reach 14.8 percent, followed by a rapid decline in 2028 and 2029.
In addition to the IMF program, Egypt has received financial support worth €7.4 billion from the European Union for the period between 2024 and 2027.
