Reports that Egypt and the IMF are in negotiations over some kind of future cooperation suggests that the authorities are trying to soothe investor fears of fiscal loosening. But the absence of financing means that the government would not be under pressure to meet IMF fiscal targets and structural reforms are unlikely to be pushed through. Meanwhile, as we had warned would happen, the Saudi stock market has now erased all of its gains this year. And the outcome of Tunisia’s election mean that there will be few efforts to tackle the country’s large imbalances in the coming months.
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