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Egyptian growth hit by external funding woes
11 March 2013
Egypt offers some interesting opportunities. But asset managers acknowledge that many investors will maintain a watching brief until political stability and external funding are in place, finds Paul Golden
Egypt’s financial data continues to make for grim reading. Foreign currency reserves were down to $13.6bn at the end of January – a figure equivalent to just three months of imports and a fall of 60% in two years – and the Egyptian pound has been falling against the dollar while its borrowing costs continue to rise.
In January, President Morsi was quoted as saying that the economy would grow by 5.5% next year and up to 8% in 2015, whereas the World Bank reckons growth will not exceed 3.8% in 2014.
To have any chance of meeting his target, Morsi will have to reach agreement with the IMF on a proposed $4.8bn loan, which is part of a total finance package of $14.5bn in loans and deposits on favourable terms from a range of bilateral and multilateral partners – including the IMF – designed to boost social...
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