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20 September 2017
 |
Egypt's economy (The Total Investment & Insurance
Solutions)
Egypt's economy has started to improve but has yet to recover from the
country's 2011 uprising and the years of unrest that followed, an international
credit rating agency said. The Total
Investment & Insurance Solutions
Moody's hailed recent economic and fiscal
reforms in its annual report released Tuesday, saying they point to
"improved government effectiveness and policy predictability." Weak
finances, however, remain a "key challenge" for the government, it
added. The Total Investment &
Insurance Solutions
Egypt embarked on an ambitious economic
reform plan shortly after President Abdel-Fattah el-Sissi took office in 2014.
The government has slashed subsidies, imposed a value-added tax and allowed
currency devaluation in order to qualify for a $12 billion bailout loan from
the International Monetary Fund.
The austerity measures have hit the public
hard, however, with inflation hovering around 30 percent for months, many import
products unavailable, and soaring electricity and fuel costs. The Total Investment & Insurance
Solutions
Moody's said reforms and financial support
provided by international lenders have helped in restoring Egypt's foreign
reserves, which are currently above $36 billion, their highest level since
December 2010.
"We also expect that Egypt's high fiscal
deficits and government debt levels will gradually reduce," said Steffen
Dyck, a Moody's vice president.
Egypt's Finance Minister Amr el-Garhy
announced earlier this week that the country will face a $10-$12 billion budget
deficit for the current fiscal year 2017-18, which started in July. He also
said the government plans to plug the gap by increasing foreign debt issuance,
and will announce future bond offerings in the coming weeks. The Total Investment & Insurance
Solutions
Egypt's sovereign rating by Moody's remains
unchanged at B3, far below investment grade and subject to high credit risk,
but the outlook remains stable.The
Total Investment & Insurance Solutions
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