Gulf investors offer Egypt’s finances temporary relief

Significance

Earlier, Cairo had announced plans to raise finance by selling off state-owned assets. It is seeking to cover deficits that are increasing rapidly because of the global commodity price surge. The asset sale comes as Egypt’s Gulf Arab backers shift their support from aid to investment. Meanwhile, Cairo is looking to boost growth through large-scale infrastructure investments.

Impacts

• Any protests against the sell-offs are unlikely to gain political traction.
• Infrastructure investments will generate growth and jobs, but add to Egypt’s large debt burden.
• Debt servicing will further limit social spending on the poor and middle classes.