Is Egypt Broke?
Economists have ranked Egypt as one of the most likely countries to hit bankruptcy as the economic climate remains unstable in the aftermath of several uprisings.
Noted economic news website 24/7 Wall St. has released a report off the back of Argentina defaulting on its enormous international debt titled “11 Countries Nearing Bankruptcy.” Surprising absolutely no one, Egypt was the second country mentioned on the list. The report cited “political unrest” as one of the key causes behind a lack of international investment in the country, and the reason behind the downgrade in credit rating by Moody’s in March of 2013. Egypt was downgraded to a Caa1 rating, which indicates a very high credit risk.
The average Egyptian person can feel the effects of the economic crisis; with the partial cancellation of fuel subsidies, the price of petrol has increased nearly 80%, the increase of duties has seen the price of tobacco increase, and the price of alcohol has increased by nearly 200%. Moody’s has commented on these austerity measures: despite the fact that the outlook on the Egyptian economy is still negative, they praised President Abdel Fattah el-Sisi’s commitment to decreasing the government deficit.