Former military leader Abdel Fattah el-Sisi took the oath of president Sunday and was greeted by a stock market rally of 4.7%.
This move to military rule is seen as a path to stability and predictability that investors are craving for — the EGX-30 is up over 75% in the past 12 months and a whopping 137% since the low point at the end of 2011.
But make no doubt about it, the country’s former military chief has a steep hill to climb to get Egypt’s economy back on track. Unemployment, the budget deficit and inflation are currently running between 11-13%, making it difficult for el-Sisi to maneuver.
The president and his new cabinet will need to push forward with structural and tax reforms to attract foreign direct investment. He has hired external consultants to advise on jump-starting growth, which closed out the 4th quarter of 2013 with a meager expansion of just under 1.5%.
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