Here’s why Moody’s has upgraded Egypt’s credit rating

Moody’s Credit Rating Agency has upgraded Egypt’s long-term credit rating from Caa1 to B3, maintaining a positive outlook. The agency cites several factors contributing to this decision, including a stable exchange rate against the US dollar, fiscal consolidation, and economic reforms. These reforms have resulted in a significant reduction in public debt indicators.

The agency also highlights Egypt's history of primary budget surpluses, which reached an impressive 4.9 percent of GDP in the 2026 fiscal year. Efforts to generate revenue, combined with expenditure controls and adjustments to energy prices, have led to a decrease in total government debt to 81.8 percent of GDP by June 2026, down from 95.2 percent three years prior.

The agency further notes that economic strengthening measures implemented since the start of 2024 have significantly enhanced the economy's ability to withstand exchange rate volatility. This includes a shift towards a flexible exchange rate regime and tighter monetary policy, which eliminated chronic foreign currency shortages, allowing official reserves to surge to US$57 billion by September 2026.

The updated policy frameworks have demonstrated resilience in the face of regional geopolitical developments and rising global oil prices, preventing a sharp decline in reserves. Egypt's financial outlook remains positive, with expectations that sustained fiscal discipline could further reduce government debt and borrowing costs more quickly than anticipated in the baseline scenario.

Potential divestments under the State Ownership Policy and a recovery in domestic energy production and maritime traffic could contribute to further improvements.