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Wednesday, 13 February 2019

Moody’s cites Egypt’s growth, reforms as credit-positive factors

Moody’s cites Egypt’s growth, reforms as credit-positive factors: Moody’s said yesterday that “positive sovereign credit dynamics in Egypt defy global headwinds,” citing the nation’s “large and diversified economy with robust growth potential” and “strong reform momentum with support from international lenders,” which it said helped “reduce external vulnerabilities.” The ratings agency made the remarks in a presentation (pdf) that also noted growth is recovering to pre-crisis levels, with pickups in not just the energy sector, but also manufacturing, construction and tourism.

Challenges: Moody’s said high interest rates and public debt as well as weak financing amid high fiscal deficits remain a concern. “The credit profile remains constrained by labor market challenges to absorb the rapidly expanding labor force as durable basis for social stability,” the ratings agency added, pointing to security risks as another factor that raises concern.

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