Egypt starts to benefit from its strong reform plan, despite constraints like weak government finances, confirms Moody’s Investors Service, Invest-Gate reports.

The country’s “B3 stable” credit profile reflects its large and diversified economy and strong reform momentum as well as a balance between credit strengths and challenges, Moody’s Investors Service says in an annual report on September 19.

“Although Egypt’s economic growth is still below pre-revolution levels, it has started to pick up, and investor sentiment has also improved,” Steffen Dyck, a Moody’s vice president and co-author of the report, says.

“We also expect that Egypt’s high fiscal deficits and government debt levels will gradually reduce,” he adds.

The ratings agency estimates that the general government primary deficit has been cut to 1.8% of GDP in fiscal year 2016/17, which ended on June 30, with expectations to start showing small surpluses from 2019.

Preliminary official figures expect real GDP growth of 4.2% in 2017, and Moody’s expects a further acceleration to 5.0% in 2019, spurred by the government’s structural reforms.

Faster-than-expected progress on the reform program, rapid fiscal consolidation, and improvements in debt metrics would have a positive impact on the rating, the report adds.

Early signs of the successful implementation of economic reforms that stimulate foreign direct investment (FDI) inflows, and continued strengthening of external buffers would also be credit positive.

However, any signs of reform slowdown would jeopardize the stable outlook, the report warns.