Underpinned by a diversified economy, Egypt’s economic strength has supported its B2 issuer credit rating, according to Moody’s Investors Service.
The most populous country’s large and diversified economy is reflected in its “a3″ economic strength, the international credit rating agency said in a periodic review of Egypt’s credit rating on Monday.
“Relatively weak but improving” governance indicators are balanced out by institutional and governance strength, along with Egypt’s “solid track record” of commitment to implementing reforms, Moody’s said.
On the flipside, Egypt’s public finances remain a weak spot, with a high government debt burden that is now in decline after rising temporarily due to the pandemic, the review says. While the likelihood of social upheaval is low, the review found that Egypt is still exposed to banking sector risks because of its large banking system and population. These risks, however, remain well mitigated by the sector’s stable funding structure, large liquidity buffers and resilient loan performance.
In September, a Moody’s report showed that Egypt’s credit profile is resilient to shocks.
