• S&P raises Egypt’s long-term sovereign rating to ‘B’ from ‘B-’, citing stronger growth and fiscal performance.
• Flexible exchange rate and reforms drive tourism, remittances, and foreign investment inflows, improving external balances.
• The government maintains a primary surplus of 3.5% of GDP in 2025, while debt-servicing costs remain elevated.

S&P

On Oct. 10, 2025, S&P Global Ratings upgraded Egypt’s long-term sovereign credit rating by a notch to ‘B’ from ‘B-’. Additionally, the short-term sovereign rating remained at ‘B’. Moreover, it also raised the transfer and convertibility assessment was also raised to ‘B’ from ‘B-’. 

The credit ratings agency maintains that the outlook is stable,reflecting improving growth prospects. It also reflects improved balance of payments trends against continued high government deficits and debt,

Economic Growth and Reforms

This upgrade reflects the reforms of the past 18 months including the liberalization of the foreign exchange (FX) regime. This has led to the GDP growth rebounding sharply in fiscal 2025. 

Egypt’s economy rebounded sharply after the March 2024 exchange rate liberalization. Real GDP grew 4.4% in fiscal 2025, up from 2.4% in 2024, and is expected to average 4.8% between 2026 and 2028. Moreover, these reforms have boosted tourism and inward remittances and improved external and fiscal metrics.

The government has pursued reforms under the IMF program, including fiscal consolidation, widening the tax base, rationalizing subsidies, and privatizing state-owned companies. These measures, along with flexible exchange rates, have improved external accounts and strengthened investor confidence.

The CBE and authorities’ commitment to the liberalized exchange rate restoring market confidence. Furthermore, S&P expects Egypt’s growth to remain strong. Moreover,it expects that tourism, inward remittances, construction, IT, domestic demand, retail trade, agriculture and healthcare will likely be key drivers of growth.

Outlook and Risks

S&P highlights that ratings could improve if Egypt accelerates debt reduction, increases FDI, and diversifies its economy. Conversely, a decline in reform commitment, higher interest costs, or geopolitical shocks could trigger negative rating actions. However, Egypt’s reforms, coupled with strong external support and prudent fiscal management, underpin a stable outlook.