Fitch reiterated its stable outlook on
However, the agency is quick to point out that long term ratings of B- reflects substantial risks and challenges. On the political front, the rating agency believes that the clampdown on the Muslim Brotherhood brings a greater risk of political radicalization, while donor aid inflows will be insufficient to permanently address structural trade and fiscal deficits. In particular, the prospects of making a major improvement in the fiscal deficit is unlikely given the fact that fiscal consolidation would require tackling politically sensitive subsidies.
As a result, Fitch forecasts the double digit budget deficit as a percentage of GDP to continue well into 2015 and debt/GDP ratio to reach over 90%. Likewise,
Macroeconomic factors such as low economic growth, growing unemployment and high inflation are a weakness for
The agency concludes that in comparing Egypt's 2015 forecast with those of peer groups, the damage to the country's credit profile in three years of political and economic turmoil highlights the difficulty of generating outcomes that could return the rating to its end-2010 level.
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