Global rating agency Standard & Poor’s on Friday downgraded Egypt’s long-term sovereign rating to “B-” from “B” – indicating increased financing pressures on the country.
Egypt faces economic challenges that have led to a series of currency devaluations and record inflation, with rising costs for basic imports following the Russian-Ukrainian war.
Standard & Poor’s said the downgrade reflects repeated delays in implementing monetary and structural reforms in the country, among other factors.
A Reuters poll on Thursday showed that the Egyptian economy will grow more slowly than previously expected, with purchasing power eroding due to inflation and the weakness of the Egyptian pound.
“Inflationary pressures are likely to remain high as we expect further weakness in the exchange rate,” Standard & Poor’s said in a statement.
Earlier in October, credit ratings agency Moody’s downgraded Egypt’s credit rating by one notch, attributing this to the deterioration of the country’s ability to sustain debt.
“Due to the foreign currency crisis, we expect GDP growth to slow further in fiscal 2024,” Standard & Poor’s added, putting the country’s outlook at “stable.”
