Fitch: Tourism resumption boosts Egypt’s growth rate to 5.5%in FY22-23

20 / 10 / 2021

By Marwa Nassar - -

Fitch Ratings has affirmed Egypt’s long-term foreign-currency Issuer Default Rating (IDR) at ‘B+’ with a Stable Outlook.

Global economic recovery and resumption of tourism to Egypt will drive an increase to 5.5% growth in FY22-FY23, it said in a report Wednesday.

Egypt’s ratings are supported by its recent record of fiscal and economic reforms, which the authorities are continuing, as well as its large economy, which has demonstrated stability and resilience through the global health crisis, according to the report.

Fitch said “We expect a slightly lower FY22 deficit on the back of revenue measures, including a Customs Law, various fee revisions and modernization of the tax system, in line with a government target to increase tax revenue/GDP by 2pp over the next four years. Fiscal policy is anchored by a primary surplus target of 2% of GDP over the medium term – the primary surplus averaged 1.8% of GDP in the past three years.”

It added “We expect faster growth and ongoing primary surpluses to reduce government debt/GDP to 86% in FY22.”

Egypt’s economic growth outperformed the vast majority of Fitch-rated sovereigns throughout the coronavirus pandemic, supported by resilient domestic demand, gas production and a public-sector investment program in the face of sagging tourism and export-oriented sectors.