US rating agency Standard and Poor’s has cut Egypt’s credit outlook to negative from stable.

The rating agency cut the outlook amid a continued foreign exchange crisis and financial aid from the Gulf likely to decline considering “the slump in their oil-related recenues”.

“Egypt’s external and fiscal vulnerabilities might increase further over the next 12 months,” S&P said in a statement. “This could dampen the country’s economic recovery and exacerbate sociopolitical challenges.”

Egypt’s economy has continued to struggle with tourist arrivals declining by more than 40 per cent since the downing of the Russian passenger flight in October 2015. The non-oil economy has also contracted significantly amid the currency crisis.

As such, S&P said it may lower the rating if foreign exchange reserves decrease more quickly than currently expected, or if current account financing, including aid from GCC countries, declines. “Deteriorating domestic fiscal funding options, increased political risk, or a weaker institutional environment could also lead us to lower the ratings.”