Egypt default fears on the rise

The IMF and foreign investors are growing increasingly concerned about the lack of reform progress from Egypt’s government. The pound appears to still be heavily managed and the government’s privatization drive is stuck in first gear. For now a path out of this crisis is there if officials act quick to credibly commit to pursue these policies, but the path is becoming increasingly narrow. If officials don’t act soon, there is a chance Egypt gets swept up in a vicious cycle of messy devaluations, surging inflation and higher interest rates, and a greater risk of sovereign default.