Sectarian clashes threaten Egypt's economic recovery
09 May 2011
Weekend clashes between Christians and Muslims in Cairo, which left a dozen killed and more than 220 wounded, threaten to derail the economic recovery that had gained traction in Egypt over the past few weeks.
Egypt's economy, largely dependent on tourism, has been impacted by the upheaval since January, which saw the Hosni Mubarak regime being toppled following nearly three weeks of political unrest.
International ratings agency Fitch recently downgraded Egypt by a notch and a recent report claimed that the country was the hardest hit by political unrest in the region.
''Egypt appears to be the hardest hit, with Tunisia somewhat less affected, while Bahrain's public and external finances have improved compared to Fitch's previous forecasts due to the increase in oil prices,'' said Richard Fox, Fitch's head of Middle East and Africa Sovereign Ratings group.
Inflation rose to 11.5 per cent in the year to March and its budget deficit is estimated to top 10 per cent in the current fiscal. Food and fuel prices have also soared in recent weeks. Observers point out that unemployed youth in the impoverished Cairo suburb of Imbaba were behind the weekend violence.
After the sectarian violence, which saw arsonists burn two Coptic churches in the Cairo suburb over the weekend, thousands of Coptic Christians are demanding the removal of field marshal Mohamed Hussein Tantawi, the top military ruler, after sectarian
