Moody’s, as reported by the Cabinet Media Center on Monday,
noted that key developments include a shift in policies towards exchange rate
flexibility and inflation targeting. These measures reduce external imbalance risks
and enhance the economy’s resilience to shocks.
The agency added that recent developments in Egypt indicate
improved creditworthiness, consistent with a positive outlook. Economic growth
rebounded to 4.4% in 2024-2025 and rose to 5.3% in the first quarter of
2025-2026, driven by the non-oil manufacturing and tourism sectors.
The current account deficit also declined in 2024-2025,
supported by higher remittances from Egyptians abroad and increased tourism
revenues, which outweighed the impact of a widening trade deficit and the
continued decline in Suez Canal revenues.
Moody’s expects domestic borrowing costs and interest
payments to begin declining in the coming period, supported by continued fiscal
consolidation, lower inflation, enhanced credibility of the Central Bank, and
diversification of local funding sources.