Reforms have sparked improvements in Egypt’s public finances and economic conditions, but challenges remain, stated Moody’s Investors Service in its recent report “Credit Analysis – Government of Egypt”. Challenges include government’s relatively large financing needs, structural economic issues such as unemployment and inflation, and political risks; however, economic and fiscal reform momentum in Egypt will help fiscal deficits and government debt levels to gradually reduce, Moody’s added. Moody’s projects Egypt’s real GDP growth at 5% for FY2015/2016, up from an expected 4.5% in FY2014/2015. Egypt’s economic growth will be supported by both public and private investment, Moody’s further added. Stronger growth in capital goods imports connected to expected increase in investment, coupled with weak global demand, may weigh on net exports’ contribution to growth. Moody’s also noted that while Egypt’s government debt has slightly reduced in FY2014/2015, it remains elevated as a result of persistent fiscal deficits. Government’s targeted reduction of fiscal deficit will depend on revenue performance. Suez Canal expansion is expected to make credit-positive contributions to Egypt’s fiscal revenues and balance of payments over medium-term.