Protests in Egypt over the past few days have ignited concerns that the country is on the cusp of another period of political upheaval. Past experience suggests that this would be disruptive for the economy and government efforts to quell unrest, such as fiscal loosening and keeping a tight grip on the currency, could fuel a renewed build-up of macro imbalances. Structural reforms needed to boost productivity growth and living standards would be put on the back-burner.
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