Recent falls in the pound and rising borrowing costs forced Egypt’s Ministry of Finance to revise up its targets for debt and the budget deficit earlier this week, but we remain of the view that the government will be able to muddle through and that a public debt crisis will be avoided. And it’s not just the government that’s feeling the pinch from a weaker pound; other sectors are feeling the effects. Imports are tumbling amid weaker domestic demand but there are signs that tourism may be receiving a boost, all of which will support an improvement in the external position.
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