Economists are warning of a bit too much reform, a bit too fast: The prices of fuel, electricity, water and metro tickets have risen back-to-back over the past couple of months, prompting a number of economists speaking to Reuters to warn that the rapid pace of the reforms could lead to high inflation “that would crimp consumption, put off a quick recovery and deter potential investors.” Among them is our friend Mohamed Abu Basha, lead economist at EFG Hermes, who warned too many reforms at once might fail to quickly revive the ailing economy. “Typically in fiscal consolidation the risk is that you enter a period of stagnation,” Abu Basha said. “You do a lot of reforms but they weigh too much on the economy’s capacity to grow.”

Nonetheless, we’re headed in the right direction in the long run, especially when foreign direct investment is concerned. “In the grand scheme of things, whatever harsh austerity measures are being put in place today, they lay a very strong foundation for private-sector-led growth over the coming five years,” said Hany Farahat, senior economist at Egyptian investment bank CI Capital. “No investor will come to Egypt if there is a risk of overspending or over-borrowing, which risk pressure for devaluation of the currency and an outflow of capital,” he added.