Real Tests to come as Egypt economy revamp posts early gains

Egypt’s efforts to ease a crippling economic crisis, including floating the pound and cutting subsidies, are showing signs of success. Foreigners are investing again in stocks and local-currency debt, and dollars are becoming more available.

But in many areas, the benefits of policies that helped to secure an International Monetary Fund loan are not yet apparent. There are early signs of unrest on the streets as prices surge, while tourists still put off by political upheaval and terrorist attacks are yet to return in their previous numbers. Below are some of the challenges still facing policy makers.

The government of President Abdel-Fattah El-Sisi has avoided a major backlash against its policies, in part because it cracks down on dissent. Limited protests last week against lower bread subsidies illustrate the potential for instability. Problems facing the poor -- especially soaring prices -- may provide a rallying point before next year’s presidential election, said Hani Sabra, head of the Mideast practice at New York-based Eurasia Group.