Moody’s Investor service affirmed Egypt’s long term and senior unsecured bond rating at a stable B3 in which credit risks face deep structural concerns such as weak government reserves, weak external payment position, and continued security concerns, the Daily News Egypt reported

The stable rating outlook reflects Moody’s view that despite slow implementation of fiscal reforms over the past 12-18 months, upward and downward pressures on the rating are balanced. Moody’s assess the IMF $12b loan as credit-supportive, because it will alleviate some of Egypt’s external liquidity pressures and also promote the reform agenda, according to Moody’s website.

The Egyptian government has a sizable fiscal deficit of more than 12% of the Gross Domestic Product (GDP). The country’s high government debt levels is close to 100% of GDP. These factors, coupled with weak debt affordability ratios exceed the median for B3-rated peers such as Pakistan with 65% debt but also remains lower than Greece which suffers from 175% debt of GDP.

The government has recently introduced a new round of electricity price hikes, which together with the civil service law will help to keep current spending in check. The expected introduction of value-added tax and measures to improve tax compliance will help increase government revenues and support a gradual reduction in the government’s large fiscal deficit to 10% of GDP by fiscal year 2019.