Egypt in turmoil (again)

Egypt’s “second revolution” has made the outlook for the Arab world’s most populous nation highly uncertain. The economy is already extremely fragile – growth is sluggish, unemployment is high and the fiscal deficit is widening. The good news is that Saudi Arabia, Kuwait and the UAE have recently pledged $12bn of aid, which should prevent Egypt from falling into a balance of payments crisis in the very near-term at least. This has buoyed the financial markets – the equity index is up by 10% since the start of the month.