Fitch affirms Egypt’s credit rating at “B” with a stable outlook

Fitch Ratings has affirmed Egypt’s long-term foreign-currency sovereign credit rating at “B” with a Stable Outlook.

The agency noted that the rating is supported by expectations of relatively high economic growth for the Egyptian economy, continued strong support from international and regional partners, as well as the economy’s large scale compared to other peer countries in the same rating category.

Fitch stated that since the beginning of this year, the Egyptian economy has demonstrated improved resilience against external pressures. Total international reserves increased by approximately $5.5 billion over the first eight months of the year, reaching around $54.4 billion.

Additionally, the Central Bank of Egypt’s (CBE) net foreign assets surplus rose to nearly $19 billion in August, marking an increase of $5.6 billion during the first eight months of the year.

Fitch added that Egypt’s flexible exchange rate policy faced a real test with the outbreak of the war involving Iran, which led to an outflow of over $6 billion in foreign portfolio investments from government debt securities (around 1.4 percent of GDP).

This caused the Egyptian Pound to depreciate by more than 14 percent against the US Dollar. Despite these pressures, the CBE maintained currency convertibility without imposing foreign exchange restrictions or supporting the exchange rate, thereby enhancing the credibility of the flexible exchange rate regime.

The rating agency highlighted that “hot money” inflows returned quickly to the Egyptian market after weathering the initial war shock, helping the Egyptian Pound gradually recover.

Fitch expects that following the conclusion of Egypt’s IMF program in November 2026, the CBE will continue to maintain positive real interest rates alongside flexible exchange rate management.

Despite ongoing challenges, Fitch projects continued economic resilience, estimating GDP growth at approximately 5.1 percent in 2026, driven by improved performance across the tourism, manufacturing, and consumer sectors. While the agency expects growth to slow slightly to around 4.7 percent in 2027, it noted that this pace remains relatively high compared to many peer economies.

On the other hand, Fitch warned of persistent vulnerability factors, primarily weak public finances, exceptionally high interest-to-revenue ratios, significant external financing needs, inflation, and ongoing geopolitical risks.