Growth Stalled Amidst Political Transition

Egypt's macroeconomic outlook remains weak in the early stages FY2011/12 (fiscal year beginning on July 1), as ongoing political risk and elevated policy uncertainty continue to weigh on the country's near-term growth prospects. While the financial system has held up reasonably well considering the unprecedented events that have transpired since January, which included the closure of the stock market for two months, a host of recently released data nevertheless underpin our view that consumption and fixed investment in particular will suffer pronounced downturns over the coming quarters.

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