Egypt’s economic recovery is proceeding economic activity grew by 6.8 percent in the first quarter of FY15, the highest rate since the financial crisis, on the backdrop of improved sentiment, rebound in tourism, and base effect. This followed better economic activity in the third and fourth quarter of FY14, which grew by 2.5 percent and 3.7 percent respectively, compared to 1.2 percent in the first half of FY14. However, growth for the whole fiscal year remained subdued at 2.2 percent. Net exports continued to limit growth, while investments started to contribute positively to growth alongside accelerated disbursement of stimulus spending. Economic recovery is important to establish stability ahead of the Parliamentary elections (a major milestone in Egypt’s political roadmap). The date of the elections is yet to be determined. Inflationary pressures mounted early in FY15 due to higher taxes and fuel/electricity prices; however this was short lived and prices are starting to decelerate. Inflation increased in July 2014 by 3.5 percent, the highest monthly increase since the 2008 global food price shock. Accordingly, inflation averaged 11.2 percent in the first quarter of FY14, before decelerating in November to 9.1 percent on the backdrop of lower food inflation. Headline inflation is expected to average 11-12 percent in FY15. Internal market reforms being implemented can help partially address structural supply bottlenecks and help contain inflationary pressures. Egypt has benefitted from large scale financial support from the Arab Gulf Countries, which allowed authorities to jumpstart the economy by embarking on stimulus spending worth three percent of Gross Domestic Product (GDP) in FY14, lowering cost of borrowing by 400 basis points in FY14, and increasing foreign reserves.