Egypt’s government finances hit rock bottom
High external financing requirements cloud Egypt's fiscal outlook.
Egypt’s government finances are now the most fragile in the MENA region, according to ECR economists. Analysts have lowered their scores in the survey’s government finances indicator by 2.4 points (out of 10) since September 2010. This has resulted in the country’s score falling below even lowly Yemen’s in the ECR rankings.
A recent report by rating agency Standard & Poor’s estimated Egypt’s gross external financing needs will be approximately 100% of current-account recipients in 2012. It added that Egypt’s large net external liabilities position and weak external liquidity present high external vulnerabilities, and projected Egypt’s current-account deficit at 3.7% of GDP in 2012 compared with 1.7% in 2011. Egypt’s position in the ECR’s rankings has continued to deteriorate in 2012, with the sovereign falling eight places in the ECR rankings to 108 since the beginning of the year, a fall of 12 places since January 2012. Egypt’s overall country risk ranking has decreased by 58 places since January 2011, shortly before the revolution that led to the overthrow of president Hosni Mubarak after three decades in power.
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| Source: ECR |
A recent report by rating agency Standard & Poor’s estimated Egypt’s gross external financing needs will be approximately 100% of current-account recipients in 2012. It added that Egypt’s large net external liabilities position and weak external liquidity present high external vulnerabilities, and projected Egypt’s current-account deficit at 3.7% of GDP in 2012 compared with 1.7% in 2011. Egypt’s position in the ECR’s rankings has continued to deteriorate in 2012, with the sovereign falling eight places in the ECR rankings to 108 since the beginning of the year, a fall of 12 places since January 2012. Egypt’s overall country risk ranking has decreased by 58 places since January 2011, shortly before the revolution that led to the overthrow of president Hosni Mubarak after three decades in power.
This article was originally published by Euromoney Country Risk.
