Moody's credit rating agency has established its classification of the Egyptian economy at the level of «B2» with a stable outlook, attributing the reason to the size of the major economic and structural reforms that have made the Egyptian economy’s performance more flexible and able to absorb the economic shock caused by the outbreak of the Coronavirus pandemic.
According to the global credit rating agency, the fruits of Egypt's economic reforms, which were represented in the availability of a strong foreign exchange reserve and a broad domestic financing base and imports sufficient to cover external debt payments, all contributed to creating a buffer zone that the Egyptian economy avoided the storm of capital displacement that swept other emerging markets in the wake of the Coronavirus pandemic.
The agency indicated that its credit view of the Egyptian economy stems from the increased competitiveness supported by the improvement in the performance of the local currency following the decision to liberalize the currency exchange rate in 2016, and the development of the Zohr gas field, which contributed to strengthening investment activity in the energy and other sectors.
The credit institution granted a “BA” degree in its evaluation of the effectiveness of the fiscal policy in Egypt to reflect the structural shift towards achieving initial government surpluses from FY 2019, and the trend towards providing a surplus of 1% of the country's GDP over the next few years. Moody's also granted a “BA” score for the efficiency of monetary and macroeconomic policies in Egypt, reflecting the success of the Central Bank's efforts to keep the price level relatively stable since it decided to liberalize the pound exchange rate against the dollar in 2016 until July of last year (2019), after which inflation rates recorded successive record declines in line with the bank's target range.
Source (Al-Sharq Al-Awsat newspaper, Edited)
