Minister of Finance Amr El-Garhy welcomed the Friday decision of Standard & Poor’s (S&P) to raise Egypt’s credit rating to B from B-, stressing that this step confirms that the state is on the right path and asserts confidence in the Egyptian economic reform programme.

El-Garhy added that the decision will contribute to attracting more foreign investments to the country.

S&P Global Ratings raised Egypt’s sovereign credit rating to B from B- for the first time since 2013, backed by the improvements in business fundamentals, while the economic outlook was revised to stable from positive according to the agency’s report issued on Friday.

According to the report published by S&P, the revised credit rating reflects the competitive exchange rate, increase in natural gas production, and the witnessed increase in exports that led to improvements in Egypt’s current account deficit.

Moreover, the credit rating agency said that inflation is on a declining path, due to the effective monetary policy adopted.

Consequently, S&P believes that the ongoing economic and fiscal reforms will support rising business confidence and sustain capital inflows.

The report concluded that the re-election of President Abdel Fattah Al-Sisi in March will increase political stability, and in turn will ensure the continuity of the economic reform programme.

According to El-Garhy, S&P’s decision reflects the improvement of the Egyptian economy’s indicators, according to the assessment of the institution, in view of the continued economic reform being carried out by the Egyptian government. The implementation of such reform measures as a flexible exchange rate policy enhances the competitiveness of Egypt.

Furthermore, he explained that the report praised the country’s high growth rates and the low unemployment rates, as well as the improvement of the Egyptian economy’s structure, which has become more balanced through the diversification of growth sources over the last few years, led by investment and exports rather than relying on local consumption.

Meanwhile, Ahmed Kouchok, deputy minister of finance for financial policies and institutional development, expected that S&P will continue to raise its ratings for Egypt’s economic growth over the next four years (2018-2021) from 4.4% to 5.4%.

He noted that S&P’s report sheds light on the recent package of legislative reforms carried out by the Egyptian government, such as the Industrial Licensing Law, the new Investment Law, the Natural Gas Law, and the Bankruptcy Law, which will contribute to improving the business environment during the coming period.