A downturn in inflation will boost hopes that the tough medicine of the $12bn IMF loan and a 55%
currency devaluation is starting to cure the patient.
• Political risk (HIGH): IS has warned it may carry out repeats of the Coptic church bombings that killed
dozens of worshippers. Egypt’s involvement in the Qatar diplomatic embargo may add to tensions.
• Economic risk (MEDIUM): Growth could slow sharply as the fiscal squeeze takes effect while there is
a risk that the targets under the IMF programme may be hard to achieve.
• Financial risk (MEDIUM): The banking system has proved robust during the turmoil of the last few
years and received an upbeat rating from Moody’s. But Egypt’s external liquidity position remains vulnerable.
• Commercial risk (MEDIUM): The government has passed a long-awaited investment law and but the
ban on passengers taking laptops on board flights to the US and UK will irk business travellers. However
investment capital is returning.