Fitch revises Egypt outlook to positive

Fitch Ratings said it revised the outlook on the Arab Republic of Egypt's long-term foreign-currency issuer default rating to positive from stable and affirmed the rating at BB+.

The agency also affirmed its long-term local-currency issuer default rating at BBB with a stable outlook, its short-term foreign-currency issuer default rating at B and the country ceiling at BB+.

"Egypt's creditworthiness is improving gradually, thanks to ongoing economic reforms which address many of the areas that still weigh on Egypt's ratings," Richard Fox, head of Fitch's Middle East and Africa sovereign rating team, said in a written statement.

"The budget deficit and debt ratio will fall appreciably this year and have clearly turned a corner; banking system restructuring is nearing completion; and further reforms are planned to improve the business environment. Growing confidence in the policy framework has brought increased investment and accelerated economic growth. A current account surplus, coupled with strong capital inflows, has increased reserves and helped Egypt attain net external creditor status last year - unusual in the 'BB' rating category."

The ratings also reflect the country's political risks and relatively low albeit rising per capita income, Fitch said. But the government is making progress in ensuring the benefits of the country's growth are distributed more evenly. And the tourist sector is resilient in the face of sporadic terrorist attacks.

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