CAIRO: The recent plane crash in the Sinai is “credit negative” for Egypt, and will weigh on tourism, according to a Thursday statement by Moody’s credit rating agency.
Russia, a major source of tourists, announced earlier this week that it was suspending all flights to Egypt pending the investigation in to the crash. A number of other countries have suspended their flights to the peninsula, over fears that an Islamic State group affiliate was responsible for downing the plane.
Egypt, currently rated as B3 stable, was dealt a previous blow by Moody’s in October, when the agency labeled its continued drop in foreign reserves as credit negative.
A July rating from Moody’s had raised Egypt’s status from negative to stable, however this change was based on expectations of a recovering tourism sector, as well as increased foreign investment.
Egypt stands to lose 6.6 billion EGP ($840 million) under the scenario that Russia and Britain continue to suspend flights to the Sinai Peninsula for three months, Tourism Minister Hisham Zaazou stated Wednesday.