Amid a worsening economic crisis, Egypt will balance economic austerity with the need to maintain social and political stability. Recent data has raised concerns about Egypt’s near- and long-term financial stability, with the country experiencing slower-than-expected economic growth in July. Central Bank data released last week also showed that net foreign assets held by Egypt’s commercial banks reached a record deficit in June amid a lack of foreign currency inflows. The shortages of hard currency highlight the severe balance of payments issues that the country faces, including a large foreign debt burden, high inflation and a depreciating currency despite costly interventions by the Central Bank. Moreover, Egypt is currently grappling with severe electricity shortages amid a record heat wave that has led to rolling blackouts. By adding to the overall economic malaise felt by the population, the energy crisis has sparked discontent, as evidenced by the growing number of Egyptians...
