Moody's Upgrades Egypt's Credit Rating to 'B3' with Positive Outlook - Sarmad

Moody’s upgraded Egypt’s credit rating to B3, maintaining a positive outlook.

According to the agency’s statement, Moody’s, the global credit rating agency, raised Egypt’s long-term sovereign credit rating from Caa1 to B3, amid strong macroeconomic stabilization and structural reforms.

The upgrade was driven by Egypt’s efforts to consolidate public finances and implement structural reforms.

The agency noted that “Egypt’s shift to a flexible exchange rate and a tighter monetary policy have bolstered foreign exchange reserves and the economy’s capacity to absorb shocks.”

Moody’s added that “Egypt’s positive outlook is based on the likelihood of accelerating the pace of debt and interest burden reduction faster than our base case expectations.”

The agency forecast that “the Egyptian government will continue its public finance consolidation measures after the current International Monetary Fund (IMF) program ends in December 2026.”

In a related development, the IMF stated on Thursday that Egypt has made good progress in restoring macroeconomic stability despite external challenges, but emphasized that it must accelerate structural reforms to reduce the state’s role in the economy.

Egypt, which is preparing for the final review of an $8 billion IMF loan program in the coming weeks, indicated that it will not seek additional funding from the fund after the program concludes in December.

Moody’s said, “The government’s ability to maintain this positive credit trajectory despite a difficult external environment and rising oil prices highlights the sustainability of the improvement, which is underpinned by more effective policies.”

A statement from the Cabinet last month indicated that the Egyptian economy grew by 5.1% in the 2025-2026 fiscal year, compared to 4.4% in the previous year.

Standard & Poor’s and Fitch reaffirmed their ratings on Egypt last week with a “stable” outlook.