THE INTERNATIONAL ratings agency Standard &Poor's (S&P) this week upgraded its outlook for Egypt's economy from “stable” to “positive” citing “gradual economic recovery” as the reason. The upgrade is based on an “improving, albeit still fragile, political stability, alongside policymakers' commitments since 2014 to embark on economic reforms. These include subsidy and income tax reforms, a new law on investment, and the announced value-added tax (VAT) system on goods and services,” noted a S&P statement. The expected continuation of funds from the Gulf States to help manage the country's short-term fiscal and external financing needs was another positive aspect highlighted in the statement. S&P projected a growth rate of about 4.3 per cent on average for Egypt in 2015-2018, outstripping the 2.1 per cent average in 2011-2014. The move follows several upgrades by international ratings agencies of the economy since December, when Fitch gave Egypt a positive outlook. The last upgrade was last month when Moody's upgraded the government's bond rating to B3 with a stable outlook, rising from Caa1. Egypt's economy faced a series of downgrades from the ratings agencies after the 25 January Revolution and on the back of declining foreign reserves. The upgrades mean that bonds issued by Egypt are seen as less risky than before, thus bearing lower interest rates and putting less pressure on public finances. The government said on 26 March it had hired seven banks to help sell US$1.5 billion worth of bonds. This week's positive outlook by S&P also reflects the possibility that it could raise its long-term ratings for Egypt over the next 12 months if the economic recovery outperforms current expectations, or if narrower-than-expected current account deficits lead to a stronger position, according to the statement. The upgrade will help ease government funding and encourage international and regional financial institutions to offer further funding, the state news agency MENA cited finance minister Hany Kadry Dimian as saying.