In six months, "fiscal sustainability will come under severe pressure" and Egypt will risk bankruptcy. The ominous prediction comes from Merrill Lynch, which yesterday published a report on the future of the North African country, which this week was a military coup.
According to the American Bank, at the end of the year Cairo may run out of money to pay off debts and domestic and foreign suppliers. Above all, the vertical collapse of tourism will weigh heavily, already down by 17,3% in the first quarter of this year. In 2012, revenues related to this sector had returned to 12 million, after the 37% drop recorded in 2011, when the overall figure had dropped to 9 million compared to 14 in 2010. Things are even worse on the side of financial revenues, which from 46 billion dollars in 2010 to 13 billion in 2012.
"We doubt that credible financial reforms will take place in this period - writes Merrill Lynch -, and an agreement with the Monetary Fund is also unlikely". The pre-agreement of 14,5 billion dollars in aid (4,8 directly from the IMF and the others from the banks with the guarantee of the fund) had been reached at the beginning of the year, but to make it definitive it was expected that they would be launched the reforms promised by Morsi. Now the situation is deadlocked.
