Egypt’s improved fiscal performance, rising foreign reserves, and ongoing economic reforms support the upgrade, as government debt declines and growth gains momentum.
Egypt’s Cabinet announced on Saturday that Moody’s Ratings has upgraded the country’s long-term sovereign credit ratings for both local and foreign currency to B3, while maintaining a positive outlook, citing progress in economic and fiscal reforms that have strengthened public finances, boosted foreign reserves, and supported economic activity.
The Cabinet said the agency also upgraded its ratings for Egypt’s foreign-currency unsecured debt issuances, while retaining a positive outlook on the country’s credit profile.
The decision reflects Moody’s improved assessment of Egypt’s creditworthiness and its capacity to meet financial obligations, supported by improving economic indicators and ongoing efforts to reinforce financial and monetary stability.
Fiscal Consolidation and Structural Reforms Support Upgrade
Moody’s attributed the upgrade to Egypt’s fiscal consolidation efforts and structural reforms, which have placed government debt and interest burdens on a downward trajectory.
Improvements in tax collection efficiency and the rationalization of public spending have contributed to fiscal consolidation. Meanwhile, the adoption of a flexible exchange rate regime and tighter monetary policy have helped strengthen external reserves and improve the economy’s ability to withstand external shocks.
The agency noted that sustained fiscal discipline and further reforms could lead to faster-than-expected reductions in government debt and debt-servicing costs, supporting its decision to maintain a positive outlook.
Government Debt Falls as Foreign Reserves Exceed $57 Billion
In a statement, Egypt’s Ministry of Finance said the upgrade also reflects the economy’s enhanced resilience to external shocks and its improved capacity to sustain growth.
According to the ministry, stronger economic performance helped reduce government debt to 81.9% of gross domestic product (GDP) in June 2026, while net international reserves exceeded $57 billion in September 2026.
Tax revenues also increased to 13% of GDP, representing a rise of 1.6 percentage points over two years, without imposing additional burdens on citizens or investors, the ministry said.
The ministry added that these developments demonstrate the Egyptian economy’s improved ability to sustain growth despite external economic challenges.
Productivity and Private Investment Remain Key Priorities
The Ministry of Finance said the government’s next phase of economic policy will focus on boosting productivity, advancing structural reforms, maintaining fiscal discipline, and supporting domestic production and exports.
It added that Moody’s positive outlook reflects expectations of stronger economic growth as Egypt continues implementing reforms and strengthening the foundations for sustainable economic expansion.
The government also aims to introduce further measures to simplify procedures, improve the business environment, and reinforce private-sector confidence, with the objective of attracting investment and achieving higher, more stable growth rates.
The ministry emphasized that fiscal policies will remain balanced, while reforms continue to preserve financial stability and support economic development.
Reducing Debt-Servicing Costs and Expanding Social Spending
Despite the improvement in Egypt’s credit profile, the government acknowledged that high debt-servicing costs remain a significant challenge.
The Ministry of Finance reaffirmed its commitment to accelerating efforts to reduce these costs and create additional fiscal space for priority spending on healthcare, education, and more targeted social protection programs.
The government will also continue working to strengthen competition, simplify business procedures, and improve the investment climate to stimulate private investment, raise productivity, expand exports, and support sustainable economic growth.
Moody’s decision marks a positive development in Egypt’s sovereign credit assessment, while the maintenance of a positive outlook signals the potential for further improvement if fiscal discipline, structural reforms, and policies supporting production and investment continue to deliver results.
