The recent Russian plane crash in Sinai Peninsula is “credit negative” for Egypt, and will weigh on its tourism industry, according to a Thursday statement by Moody’s credit rating agency.
Russia, a major source of tourists for Egypt, announced earlier this week that it was halting all flights to Egypt pending the investigation in to the crash. A number of other countries have suspended their flights to the peninsula, over fears that an Islamic State group affiliate was responsible for downing the Russian plane.
In July, Moody’s had raised Egypt’s outlook from negative to stable, however this change was based on expectations of a recovering tourism sector, as well as increased foreign investment.
Egypt, currently rated as B3 stable, was dealt a previous blow by Moody’s in October, when the agency labeled its continued drop in foreign reserves as credit negative.
