As the Egypt reforms it’s economic in a favor of more market-oriented and less socially-responsible while rising the prices for fuel and power, cutting subsidies and introducing new taxes the state’s prospects for servicing the credits are upgraded. Meanwhile the foreign and internal debts of Egypt is rising as the country grows more and more dependent on the external financing. In a combination with lowering quality of life of the poor and young population of Egypt it may not yield the positive results.
“The substantial progress made by the government in implementing reforms agreed with the IMF has imparted a degree of financial stability not present earlier in the decade,” Moody’s said. That has helped offset debt refinancing risk, which “remains a key credit challenge for the sovereign in an increasingly turbulent global financial environment” — state Moody’s.
In fact the current course of the IMF-therapy is closely resembling the situation of 90’s when Hosni Mubarak was implementing his own reforms guided by the IMF and World Bank. His efforts were a moderate success as Egypt has lost a lot of his industrial power and made a huge base for the further deteriorating of the people condition.