Ratings agency Standard & Poor’s upgraded Egypt’s debt rating by one notch on Friday, citing stronger economic growth and moderating inflation. S&P raised Egypt’s sovereign credit rating to “B” from “B-”, which is still below investment grade but further up the scale. The ratings agency cited the improving economy, which is expected to average a growth of 5.4 percent over the next four years, reflecting “a more broad-based recovery and a slight move away from consumption” towards greater investment and net exports. Consumer price inflation fell to 13.3 percent year-on-year in March, the lowest level in nearly two years, the agency said. However, Egypt’s debt ratings remain constrained by large fiscal and external deficits, high public debt and low income levels. The country could earn a higher rating if growth outpaces forecasts, if external financing needs ebb and if reforms leads to lower debt, the statement said. But negative pressure on the rating could come from an unexpected rise in debt or “if the security environment worsens, hindering the recovery in investment and tourism,” S&P added. Egypt’s Finance Minister Amr el-Garhi, for his part, said that the better rating with a stable outlook is a new step that confirms "we are on the right track and represents a certificate of success of the Egyptian economic reform program." In a press release on Friday, Garhi explained that this decision will contribute to increasing confidence in the ability and potential of the Egyptian economy, attracting more foreign investments and reducing the cost of finance available to the state and its institutions and the private sector. According to the report published by S&P, the revised credit rating reflects the competitive exchange rate, increase in natural gas production and the witnessed increase in exports that led to improvements in Egypt’s current account deficit. Moreover, the credit rating agency said that inflation is on a declining path due to the effective monetary policy adopted. Consequently, S&P believes that the ongoing economic and fiscal reforms will support rising business confidence and sustain capital inflows.