Egypt’s economy grew by 4.9 per cent in the final quarter of the current financial year as foreign borrowing continues to drive growth. This is compared with a 2.3 per cent year-on-year rise in GDP in the fourth quarter a year ago.

Net foreign reserves even rose by $4.7bn to a 10-year high of $36bn, compared with $28.5bn in April. Egypt’s reserves saw total inflows of $7.7bn in July, including $3.7bn in foreign investments and $4bn from the local economy.

The country also received a $1.25bn loan instalment from the IMF, and has been able to attract $17bn of foreign currency inflow since the flotation of the pound, which was applied in November last year.

Worryingly for Egypt, external debt reached $67.3bn at the end of the second quarter of the financial year 2016/17, compared with $60.1bn at the end of the first quarter.

The country’s growth story has been driven by its ability to continue borrowing from abroad to fund its budget deficit and boost its balance of foreign reserves, following a currency crisis rooted in a shortage of dollars.

The budget deficit during the first nine months of 2016-17 narrowed to 9.5 per cent of GDP from 11.5 per cent in the same period a year earlier.

Although the finance ministry is able to paint a positive picture using data from the central bank, rising foreign debt and limited economic reforms could leave Cairo with no prospects for real sustainable growth in the future.

Analysts continue to point to the legislative and culture changes needed to bring foreign direct investment to the levels needed. Others have also pointed to the country’s ailing tourism sector, which improved in the last year but is still far off the potential it reached in 2010.

Dependence on foreign debt makes for good short-term news, but in the long term, policymakers in Cairo will soon find out they cannot ignore the need to reform the economy.