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Sluggish Egyptian economy reduces prospect of IMF deal

All eyes have focused on the fall of the Egyptian pound since the end of last year. But at the same time, the economy has taken a sharp turn for the worse. This suggests that job creation probably slowed and the squeeze on households’ incomes intensified. Against this backdrop, social tensions are likely to remain high, making the conditions attached to any IMF agreement, including subsidy reforms and tax hikes, a bitter pill to swallow.

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