Egypt

Summary of Economic Conditions

Tourism is another driving force of Egypt’s economy, with an annual average of 15 million tourists visiting the country before the 2011 uprising. The number of tourists dropped to 9.1 million in 2014 and to 8.9 million in 2015.[65] Tourism declined further following a terrorist attack at the end of October 2015, when a bomb was placed on a Russian airliner which exploded shortly after departure from one of Egypt’s airports, and killed 224 passengers and the crew.[66] This loss in tourism revenue plays an influential role in the struggling economy of Egypt.[67]

On Friday, 12 November 2016, the IMF executive board approved the USD 12 billion three-year extended fund facility, with a repayment agreement for 10 years at an interest rate of less than 2%.[68] The loan is in support of a reform programme that will assist Egypt to restore its macroeconomic stability; promote and boost growth; correct external imbalances; improve competitiveness; reduce the budget deficit and public debt; and provide job opportunities.[69]

Since the country floated the pound in late November, a key condition of the IMF loan, the country has begun experiencing renewed investor confidence. According to the country’s finance ministry, investors purchased in the region of USD 3.3 billion in treasury bonds up to mid-March 2017.[70] Also since the currency was floated, remittances have been on the rise again. The weaker pound is also encouraging growth in trade and tourism, and non-petroleum exports grew by 25% in January compared to the previous year.[71] There have been some harmful effects of the reforms. Thanks to the reduction in the fuel subsidy, Egyptian are spending more on fuel and electricity and less on other goods, which harms local businesses supplying the domestic market. The drop in the value of the pound has also made imports more expensive, which has pushed inflation up.[72] It is likely to take a long time before ordinary Egyptians experience the benefits of the reform programme. In the meantime, it is vital that the aspects of the programme which seek to protect the poor and vulnerable from its harsh short-term economic impact are effective. If this fails – Egypt could witness ‘bread riots’ and demand for economic reform that assists the poor that spurred protest action in the past.

  • Country Profile
  • Introduction
  • Broad Economic Indicators
  • Currency and Exchange Rate
  • Competitiveness and Ease of Doing Business
  • Foreign Investment and Largest Companies
  • Foreign Aid
  • Country Strategic Framework
  • Summary of Economic Conditions
  • Implications, Challenges and Recommendations
  • Population
  • Living Standards and Poverty Levels
  • Healthcare
  • Implications, Challenges and Recommendations
  • Qualifications Profile of the Population and Workforce
  • Levels of Schooling and Basic Education
  • Technical and Vocational Education and Training
  • Tertiary Education
  • Innovation in Egypt
  • Implications, Challenges and Recommendations
  • Labour Force
  • Employment by Sector
  • Employment by Skill Level
  • Employment by Occupation
  • Labour Productivity
  • Unemployment and Job Creation
  • Expatriates, Immigrants and the Egyptian Diaspora
  • Wage and Salary Trends and Social Insurance
  • Industrial Relations Framework
  • Labour Market Efficiency
  • The Fourth Industrial Revolution
  • Implications, Challenges and Recommendations

Economy

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