Frontera News takes a dim view of Egypt’s reform agenda: London-based and EM-focused business analysis firm Frontera News appears to take a less than optimistic view of Egypt’s progress on the economic front, postulating in a series of articles that the country is locked between the proverbial rock and hard place of appeasing the poor and attracting investments. It describes the reform process as slow, with the biggest challenge to its progress being the government backtracking or slowing down the pace of subsidy reform due to a rising inflation rate and public outcry. Frontera noted the public backlash against Supply Minister Ali El Moselhy’s attempt to cut bread rations and the subsequent backtracking. It feels that if more urgency on reform isn’t taken, Egypt risks losing subsequent payments from the IMF’s USD 12 bn facility signed last November.

Frontera expects Egypt’s economic growth to be relatively low, but predicts inflation willfall this year, citing FocusEconomics’ forecast that GDP will grow marginally in FY2017-18 to 3.8% from 3.4%. The challenge for the CBE is choosing between curbing price rise and dampening economic growth. These contrarian views don’t appear to be reflected in its analysis of the EGP float. The strength of the EGP will be used as a barometer by foreign investors: the weaker, the better.