(AFP Photo)
Moody’s Corporation estimated a decrease in Egypt’s budget deficit to 10% of GDP this year, and a decrease in public debt to less than 90% of GDP.
Moody’s raised Egypt’s credit rating after assessing the country’s economy Tuesday.
In a press release, Moody’s said the level of Egypt’s credit rating rose by one notch after a long-term loan from both foreign and local currencies, bringing each to B3 with keeping Egyptian economy at a “stable” degree.
This rise depends on the stability of the cash reserves at the Central Bank of Egypt (CBE) at $15.5bn at the end of February 2015, which provides cover for a large external debt service during the current year.
Moody’s explained that the forecast for local and foreign investments increased especially after the recent Economic Summit, where Gulf states declared support. This came in addition to the announcement of the signing of foreign direct investment (FDI) worth approximately $38bn, which reduces the risks of the balance of payments.
Moody’s predicted the government’s success in completing the economic and financial reforms to control the increase in Egypt’s public spending, in addition to reducing budget deficit.
This is considered the first positive achievement for Egypt after Moody’s decreased the Egyptian credit five times successively following the 25 January Revolution, according to Minister of Finance Hany Kadry Dimian.
