Egypt credit outlook cut to stable at S&P on lower GCC support
November 14 2015 10:00 PM

The S&P kept its long-term credit rating on Egypt at B-

Dubai/New York

The outlook on Egypt’s credit rating was cut to stable from positive by Standard & Poor’s on expectations that the country’s external imbalances will persist as it may receive reduced financial support from the Gulf Cooperation Council countries.
The S&P kept its long-term credit rating at B-. Egypt’s economic recovery is expected to remain gradual and to depend on maintaining security and political stability, the ratings company said in a statement.
“The stable outlook reflects our expectation that Egypt will largely remain politically stable, its economy will continue to progressively grow in the face of important macroeconomic headwinds, and that fiscal deficits will improve but remain at high levels,” S&P analysts including Nourredine Lafhel in Dubai said in the report. “The economic recovery is supported by improved political conditions, a recovery in construction, manufacturing, services, and tourism.”
Saudi Arabia, the UAE, Kuwait, and Oman pledged $12.5bn in economic and financial assistance to Egypt during the Economic Development Conference held in Sharm El Sheikh in early 2015. However, lower oil prices may force the GCC countries to cut their aid.
Growth in Egypt’s real gross domestic product will accelerate to 4.2% in 2015, twice the average rate for the past three years, the S&P said. Economic expansion will remain at about 4% on average per year in 2016-2018, propelled by domestic consumption and investments.

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