Further fiscal consolidation in addition to external rebalancing would lay the groundwork for a broader-based improvement in sovereign credit metrics in 2018,” said Fitch Ratings in a press statement on Wednesday. However, several challenges still lie ahead, including the risk of social unrest, which is substantial. A return of foreign inflows into Egyptian treasuries prompted a partial retracement of government debt yields, Fitch Ratings said in the statement. Consequently, these developments are in line with Fitch Ratings’s general expectations when they affirmed Egypt’s “B/Stable” sovereign rating in December following the flotation and the IMF board’s approval of a $12bn extended fund facility. If Egypt can maintain recent progress, Fitch Rating forecasts that the fiscal year (FY) 2018, starting in July, would witness a stronger growth—reaching 4.5% compared to 3.3% in FY 17—inflation, reduction, and a primary deficit decrease.

Source: Daily News Egypt March 01, 2017 15:22 UTC