S&P Global affirms Egypt’s rating amid IMF, GCC support

s&P Global Ratings has affirmed Egypt’s B credit rating with a stable outlook on the back of expectations that fresh financial support from the IMF and the GCC will help meet  “large” external funding needs.

The ratings agency believes that the Madbouly government’s track record of reform and the country’s strong growth outlook will mean that Egypt will be able to count on lenders to meet its foreign funding needs for FY 2022-2023, which total around USD 18 bn.

FDI to provide the bulk of foreign currency: S&P says that Egypt will receive almost USD 10 bn of foreign direct investment during the current fiscal year, up from USD 8.9 bn last year.

International lenders to provide up to USD 6 bn: The rating agency expects the upcoming IMF package to be in the range of USD 2-3 bn, while another USD 2-3 bn could be raised from the international bond market.

S&P thinks that GCC countries will pledge more funds to cover any funding gaps “given [Egypt’s] track record, the reduced funding needs, and the importance of stability in Egypt to the region as a whole.” The UAE, Saudi Arabia and Qatar have together pledged some USD 22 bn to Egypt since the start of the war in Ukraine, though USD 6 bn in FDI is yet to enter the country, the rating agency wrote.