Egypt’s rating is upgraded to ‘B’ by S&P as reforms spur economic growth; Fitch confirms

Fitch emphasized Egypt’s relatively high growth potential and solid partner support in its affirmation, while S&P Global raised Egypt’s rating by one notch on Friday, highlighting continuing reforms that have resulted in a remarkable turnaround in GDP growth.

Fitch last raised Egypt’s ratings to ‘B’ in November 2024, when tighter monetary conditions and foreign investments helped strengthen Egypt’s finances. S&P’s rating raise to ‘B’ is the first since Egypt began receiving financial support in March 2024.

According to S&P, the war in Gaza has brought attention to and increased Egypt’s strategic significance, which is one of the reasons why members of the Gulf Cooperation Council and other nations are still giving Egypt financial support.

“We consider the risk from an escalation of tensions with Israel has increased only moderately over recent months, and energy collaboration continues to progress,” Fitch stated in its statement.

With the aid of a $8 billion International Monetary Fund bailout program in March 2024, Egypt’s annual inflation rate has fallen from a record 38% in September 2023.

“Given the stronger GDP growth prospects, increased revenue alongside expenditure control, and primary surplus targets tied to an IMF program, we expect fiscal consolidation to continue, albeit at a gradual pace,” a statement from S&P stated.

According to S&P, Egypt’s GDP growth prospects and attempts at fiscal reduction should be supported by the IMF program as well as the commitment to a market-determined exchange rate for the fiscal years 2025–2028.

Egypt recovered well from the pandemic’s effects, as seen by a 20% increase in tourism income in the April–June 2025 quarter and a 36.5% increase in remittances from Egyptians living overseas, another significant source of foreign exchange.

S&P claims that Egypt’s GDP growth has sharply recovered as a result of the reforms implemented by the government over the last 18 months, particularly the liberalization of the foreign exchange regulation, which has also increased inbound remittances and tourism.

‘Stable’ was the outlook that S&P and Fitch kept for Egypt.

After substantial bilateral support and policy improvements, peer agency Moody’s has maintained its “Caa1” rating for Egypt since October 2023, but it has updated its outlook to “positive” from “negative” in March 2024.