Economy and security will test the Egyptian president

Significance

It is the bloodiest terrorist attack on Egyptian civilians in almost six years and has highlighted the gravity of the security threat facing the Sisi government at a time when the president also has to reckon with the risk of popular protests at economic reforms that have sharply pushed up the cost of living.

Impacts

• The threat of terrorism will hold back efforts to revive tourism, but it will not impair the essential stability of the state.
• Sisi will look to toughen anti-terrorism laws, and repression is likely to deepen.
• The 50% devaluation of the Egyptian pound has already led to a rise in inflation, and prices will rise further in the coming months.