Publication: Egypt Economic Monitoring Note, Fall 2012
Date
2012-09
ISSN
Published
2012-09
Author(s)
Abstract
Egypt is in a precarious economic
situation reflecting a difficult external environment,
political uncertainty, and weak economic policies.
International reserves have been declining rapidly to a low
level, driven by a sizeable current account deficit and
large capital outflows. Large spending increases are driving
up the fiscal deficit to unsustainable levels, with high
real interest rates and weak growth adding to the mounting
debt burden. And weak growth is fueling social pressures.
Strong financial support from Arab bilateral donors has been
holding the country afloat so far, but the leaking cannot
continue much longer and the authorities have been forced to
seek support from the International Monetary Fund (IMF) and
other donors. Egypt is in a precarious economic situation
reflecting a difficult external environment, political
uncertainty, and weak economic policies. International
reserves have been declining rapidly to a low level, driven
by a sizeable current account deficit and large capital
outflows. Large spending increases are driving up the fiscal
deficit to unsustainable levels, with high real interest
rates and weak growth adding to the mounting debt burden.
And weak growth is fueling social pressures. Strong
financial support from Arab bilateral donors has been
holding the country afloat so far, but the leaking cannot
continue much longer and the authorities have been forced to
seek support from the IMF and other donors.
Citation
“Laursen, Thomas; Badr, Karim; Zaki, Chahir. 2012. Egypt Economic Monitoring Note, Fall 2012. © World Bank, Washington, DC. http://hdl.handle.net/10986/27101 License: CC BY 3.0 IGO.”