Egypt army says it foils attack on road to Red Sea coast

CAIRO (AP) — Egypt’s armed forces said they foiled an attempted attack Wednesday on a military post on a highway linking Cairo with the Red Sea coast that was claimed by Islamic State affiliates.

The driver of a car carrying 500 kilograms (1,100 pounds) of dynamite refused to stop at the checkpoint, drawing fire from troops, the military said in a statement. The car went off the road and the driver was killed outside the checkpoint, according to the statement.

The Islamic State affiliate in Egypt claimed responsibility for the attack, saying that a suicide bomber intentionally blew himself up, killing several soldiers. The military denied the claim.

The authenticity of the claim couldn’t be independently verified, though it was carried by Twitter accounts affiliated with the group

Egypt faces threats from multiple insurgent factions, including the Islamic State affiliate in Sinai that the military says killed at least 17 soldiers in a July 1 assault there. Officials from several branches of Egypt’s security forces previously told The Associated Press that that attack killed dozens more. On June 29, Prosecutor General Hisham Barakat was assassinated in Cairo by a car bomb.

Attacks in Egypt are intensifying at a time that the economy is showing signs of recovery, following a period of economic and political instability since the 2011 uprising that toppled former President Hosni Mubarak.

President Abdel Fattah el-Sissi, a former defense minister who led the 2013 overthrow of Islamist President Mohammed Morsi, has staked his legitimacy on fixing the economy and restoring security to the Arab world’s most populous country. He partially lifted fuel subsidies last year to reduce the country’s budget deficit, a move praised by economists.

Moody’s Investors Service upgraded Egypt’s banking system outlook to stable from negative Wednesday, expecting the sector’s operating conditions to improve as economic growth accelerates and the government pushes through with economic reforms.

The agency’s estimated uptick in economic growth “will mainly be driven by large, government-led infrastructure projects, increased foreign investment and a rise in tourism,” the credit rating agency said in a statement.

Moody’s said it expects Egypt’s economy to expand 5 percent in the fiscal year ending June 2016, from an expected 4.5 percent in the previous fiscal year.

Those changes are likely to lead to rising consumer confidence and more business investments, which would increase loan growth from banks, Moody’s said.

“It signals a positive sentiment,” said Nancy Fahmy, the lead banking analyst at Beltone Financial. “We are positive on the banking sector; we really are seeing an improvement.”

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