Fitch Rating Agency confirmed its outlook on Egypt with a “B”, and a stable outlook on long-term foreign and local currency Issuer Default Ratings (IDR), according to a Fitch statement Friday.

“The issue ratings on Egypt’s senior unsecured foreign and local currency bonds have also been affirmed at ‘B’. The Country Ceiling and the Short-term foreign currency IDR have been affirmed at ‘B’,” the Agency noted.

Fitch expects a reduction in the country’s budget deficit derived from stronger growth and the decrease in commodity prices. The deficit will however remain big according to the agency.

By the end of FY2015, the budget deficit is expected to slope and stand at 11.1% of GDP, compared to the 12.8% of GDP recorded in FY14, the agency said.

Meanwhile, with the exclusion of grants, the deficit is expected to decrease to reach 11.6% of GDP in FY15, in comparison to the 17.5% of GDP recorded in FY14, Fitch noted.

Fitch sees an improved politically stable environment under President Abdel Fattah Al-Sisi, which reflects on an improved economical situation. The agency, however, did not overlook the fact that “significant sections of the population are disaffected”, namely North Sinai.

The agency highlighted that foreign reserves are enough for three months of current external payments.

Deposits worth $6bn were received by the Central Bank of Egypt (CBE) from three Gulf states in April 2015.

“GCC inflows in the form of deposits at the CBE, have pushed up gross external debt, but it remains below peers at 17.2% of GDP at end-2015,” the agency indicated.

After receiving the GCC deposits, Egypt’s international foreign reserves jumped to $20.5bn at the end of April, compared to $15.29bn the preceding month.

Concerning the balance of payments, Fitch anticipates a stable outlook over the coming couple of years, the agency however foresees  “only a marginal improvement in reserve coverage”, justifying this by indicating that “stronger inflows of foreign exchange will be used to satisfy unmet private sector demand”, the Agency said.

This June, the CBE disclosed that foreign transactions in Egypt recorded a $1bn deficit in the balance of payments in the first nine months of the current fiscal year (FY) 2014/2015. These figures compare to a surplus of $2.2bn during the same period in the last FY 2013/2014.

The agency assumes that Egypt will continue receiving financing from the GCC in the upcoming period. Further, assuming that “sporadic and at times serious attacks on security forces” will continue, it expects that the political environment will become more stabilised than in 2011-2013.

Fitch anticipates that Brent crude prices will be beneath the government’s expectations in its five-year fiscal plan. This will lead to “savings on the budgeted subsidy bill”noting that prices are anticipated to average between $65 per barrel in 2015 and $75 per barrel in 2016.

In December 2014, Fitch upgraded Egypt’s rating to B from B-, with a stable outlook. In response, Minister of Finance Hany Kadry Dimian said it was the first time Fitch would lift Egypt’s rating, following a series of low ratings over the past few years.

This positive rating would help in luring business to the country, Dimian said, also noting the necessity of pressing ahead with structural and financial reforms for improving citizens’ living standards.

Meanwhile, prior to March’s Economic Summit, Paul Gamble, the director of sovereign group Fitch told Daily News Egypt that Egypt is slowly reclaiming credit ratings it has lost over the years of political uncertainty and unrest. This is as the economy gradually responds to extensive revival attempts.