On the flipside, Capital Economics is warning that Egypt may go the way of Argentina. The reason? Egypt’s large foreign currency debt, which Capital estimates to be at around 30% of GDP at the end of 2017, up from less than 15% of GDP in 2015. “Large foreign currency debt burdens have been at the heart of the problems that have afflicted a number of emerging markets in recent years, most recently in Argentina. One of the main reasons why a build-up of sovereign foreign currency may be a source of concern is that it leaves the government exposed to swings in the exchange rate,” notes the report. “If the EGP weakens, that pushes up the local currency cost of servicing hard currency debt,” says Capital Economics.

That said, the risks of turning into another Argentina through a destabilising fall in the currency appears to be low, especially following the EGP float in 2016, notes the report. Furthermore, the government has the IMF Extended Fund Facility to keep it grounded in its fiscal consolidation measures.

Any slip-ups in the reform agenda could risk a slide of Argentina proportions: “Any signs that progress on fiscal consolidation is stalling and that the shift towards more orthodox policymaking is going into reverse would cause investors to take flight and put renewed pressure on the pound,” the report noted. It added that Egypt’s FX debt-to-GDP ratio, coupled with its already precarious fiscal situation puts it on a very slippery slope should that risk come to pass.

(We are unable to link to either report for copyright reasons)