Moody's raises Egypt's outlook to stable

AP News
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Posted: Oct 20, 2014 11:03 AM

CAIRO (AP) — Moody's Investor Services says Egypt's political and security situation has stabilized, raising the country's outlook from negative to stable.

The influential international ratings agency credits, "the launch of government initiatives towards fiscal consolidation, signs of a growth recovery and an improvement in macroeconomic stability" for its revised assessment, which was announced on Monday.

However, Moody's is still stopping short of upgrading Egypt's government bond rating; the rating will remain at "Caa1,"_essentially at junk bond level. Moody's says the continued low rating, "reflects the very weak and challenging state of Egypt's government finances."

Egypt's economy has suffered from three years of near-constant political upheaval and the collapse of the vital tourism industry. The country's finance ministry predicts growth rates of up to 6 percent within three years.