Moody's downgrades Egypt debt

Moody's Investors Service Inc said it had downgrade Egypt's debt rating to Ba2 from Ba1 and changed the outlook to negative from stable.

Moody's said the one-notch downgrade was prompted by the recent significant rise in political event risk and concern that the policy response could undermine Egypt's already weak public finances.

Moody's said Egypt suffers from deep-seated political and socio-economic challenges. These include a chronic high rate of unemployment, elevated inflation and widespread poverty.

These, together with a desire for political change, have fueled popular frustrations. In Moody's opinion, there is a strong possibility that fiscal policy will be loosened as part of the government's efforts to contain discontent.


Reuters