S&P downgrades Egypt’s credit ratings to B- over reform delays

Points clés à retenir

The rapid expansion of the money supply in Egypt over the past two years has had a significant impact, contributing to a swift rise in prices and a substantial depreciation of the Egyptian pound. Since March 2022, the Egyptian pound has lost nearly 50% of its value against the U.S. dollar. This devaluation reflects the challenges confronting the Arab world's third-largest economy, including a shortage of U.S. dollars and a growing foreign debt burden. These economic challenges have been recognized by international credit rating agencies; in May, Fitch Ratings downgraded Egypt's outlook to negative, marking the country's first downgrade since 2013. The downgrade was attributed to a lack of economic reforms and fiscal challenges. More recently, Moody's also downgraded Egypt's credit rating by one notch, from 'B3' to 'Caa1,' primarily due to concerns about deteriorating debt affordability. These rating downgrades underscore Egypt's economic difficulties and emphasize the urgent need for substantial reforms to address these challenges and stabilize the nation's financial and economic situation.