Fitch downgrades Egypt

Fitch Ratings said it downgraded Egypt's long-term foreign- and local-currency issuer default ratings to B from B+ and country ceiling to B from B+.

The country's short-term issuer default rating is affirmed at B.

The outlook is negative.

The downgrades reflect that the country's fiscal position has worsened, Fitch said.

The general government deficit widened to 10.7% of GDP in fiscal year 2012 and data for the first five months of fiscal year 2013 show a further deterioration, the agency said.

The political transition, while making significant progress, has at times been mishandled and serious divisions have opened within society, contributing to sporadic outbursts of violence, Fitch said.

The ratings also consider a balance between short-term reserve pressure, political upheaval, a weak and deteriorating fiscal position and capital flight, the agency said.

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