| Date - Field | Egypt - Economy - overview |
2008 January
Economy - overview | Occupying the northeast corner of the African continent, Egypt is bisected by the highly fertile Nile valley, where most economic activity takes place. In the last 30 years, the government has reformed the highly centralized economy it inherited from President Gamel Abdel NASSER. In 2005, Prime Minister Ahmed NAZIF's government reduced personal and corporate tax rates, reduced energy subsidies, and privatized several enterprises. The stock market boomed, and GDP grew about 5% per year in 2005-06, and topped 7% in 2007. Despite these achievements, the government has failed to raise living standards for the average Egyptian, and has had to continue providing subsidies for basic necessities. The subsidies have contributed to a sizeable budget deficit - roughly 7.5% of GDP in 2007 - and represent a significant drain on the economy. Foreign direct investment has increased significantly in the past two years, but the NAZIF government will need to continue its aggressive pursuit of reforms in order to sustain the spike in investment and growth and begin to improve economic conditions for the broader population. Egypt's export sectors - particularly natural gas - have bright prospects. |
2007 January
Economy - overview | Occupying the northeast corner of the African continent, Egypt is bisected by the highly fertile Nile valley, where most economic activity takes place. In the last 30 years, the government has reformed the highly centralized economy it inherited from President NASSER. In 2005, Prime Minister Ahmed NAZIF reduced personal and corporate tax rates, reduced energy subsidies, and privatized several enterprises. The stock market boomed, and GDP grew about 5% per year in 2005-06. Despite these achievements, the government has failed to raise living standards for the average Egyptian, and has had to continue providing subsidies for basic necessities. The subsidies have contributed to a growing budget deficit - more than 10% of GDP each year - and represent a significant drain on the economy. Foreign direct investment remains low. To achieve higher GDP growth the NAZIF government will need to continue its aggressive pursuit of reform, especially in the energy sector. Egypt's export sectors - particularly natural gas - have bright prospects. |
2006 January
Economy - overview | Lack of substantial progress on economic reform since the mid 1990s has limited foreign direct investment in Egypt and kept annual GDP growth in the range of 2%-3% in 2001-03. However, in 2004 Egypt implemented several measures to boost foreign direct investment. In September 2004, Egypt pushed through custom reforms, proposed income and corporate tax reforms, reduced energy subsidies, and privatized several enterprises. The budget deficit rose to an estimated 8% of GDP in 2004 compared to 6.1% of GDP the previous year, in part as a result of these reforms. Monetary pressures on an overvalued Egyptian pound led the government to float the currency in January 2003, leading to a sharp drop in its value and consequent inflationary pressure. In 2004, the Central Bank implemented measures to improve currency liquidity. Egypt reached record tourism levels, despite the Taba and Nuweiba bombings in September 2004. The development of an export market for natural gas is a bright spot for future growth prospects, but improvement in the capital-intensive hydrocarbons sector does little to reduce Egypt's persistent unemployment. |
2005 January
Economy - overview | Lack of substantial progress on economic reform since the mid 1990s has limited foreign direct investment in Egypt and kept annual GDP growth in the range of 2%-3% in 2001-03. However, in 2004 Egypt implemented several measures to boost foreign direct investment. In September 2004, Egypt pushed through custom reforms, proposed income and corporate tax reforms, reduced energy subsidies, and privatized several enterprises. The budget deficit rose to an estimated 8% of GDP in 2004 compared to 6.1% of GDP the previous year, in part as a result of these reforms. Monetary pressures on an overvalued Egyptian pound led the government to float the currency in January 2003, leading to a sharp drop in its value and consequent inflationary pressure. In 2004, the Central Bank implemented measures to improve currency liquidity. Egypt reached record tourism levels, despite the Taba and Nuweiba bombings in September 2004. The development of an export market for natural gas is a bright spot for future growth prospects, but improvement in the capital-intensive hydrocarbons sector does little to reduce Egypt's persistent unemployment. |
2004 January
Economy - overview | Lack of substantial progress on economic reform since the mid 1990s has limited foreign direct investment in Egypt and kept annual GDP growth in the range of 2-3 percent in 2001-03. Egyptian officials in late 2003 and early 2004 proposed new privatization and customs reform measures, but the government is likely to pursue these initiatives cautiously and gradually to avoid a public backlash over potential inflation or layoffs associated with the reforms. Monetary pressures on an overvalued Egyptian pound led the government to float the currency in January 2003, leading to a sharp drop in its value and consequent inflationary pressure. The existence of a black market for hard currency is evidence that the government continues to influence the official exchange rate offered in banks. In September 2003, Egyptian officials increased subsidies on basic foodstuffs, helping to calm a frustrated public but widening an already deep budget deficit. Egypt's balance-of-payments position was not hurt by the war in Iraq in 2003, as tourism and Suez Canal revenues fared well. The development of an export market for natural gas is a bright spot for future growth prospects, but improvement in the capital-intensive hydrocarbons sector does little to reduce Egypt's persistent unemployment. |
2003 January
Economy - overview | Egypt improved its macroeconomic performance throughout most of the last decade by following IMF advice on fiscal, monetary, and structural reform policies. As a result, Egypt managed to tame inflation, slash budget deficits, and attract more foreign investment. In the past four years, however, the pace of reform has slackened, and excessive spending on national infrastructure projects has widened budget deficits again. Lower foreign exchange earnings since 1998 resulted in pressure on the Egyptian pound and periodic dollar shortages. Monetary pressures have increased since 11 September 2001 because of declines in tourism and Suez Canal tolls, and Egypt has devalued the pound several times in the past year. The development of a gas export market is a major bright spot for future growth prospects. In the short term, regional tensions will continue to affect tourism and hold back prospects for economic expansion. |
2002 January
Economy - overview | Egypt improved its macroeconomic performance throughout most of the last decade by following IMF advice on fiscal, monetary, and structural reform policies. As a result, Cairo managed to tame inflation, slash budget deficits, and attract more foreign investment. In the past three years, however, the pace of reform has slackened, and excessive spending on national infrastructure projects has widened budget deficits again. Lower foreign exchange earnings since 1998 resulted in pressure on the Egyptian pound and periodic dollar shortages. Monetary pressures have increased since 11 September 2001 because of declines in tourism, Suez canal tolls, and exports, and Cairo has devalued the pound several times in the past year. The development of a gas export market is a major bright spot for future growth prospects. |
2001 January
Economy - overview | A series of IMF arrangements - along with massive external debt relief resulting from Egypt's participation in the Gulf war coalition - helped Egypt improve its macroeconomic performance during the 1990s. Sound fiscal and monetary policies through the mid-1990s helped to tame inflation, slash budget deficits, and build up foreign reserves, while structural reforms such as privatization and new business legislation prompted increased foreign investment. By mid-1998, however, the pace of structural reform slackened, and lower combined hard currency earnings resulted in pressure on the Egyptian pound and sporadic US dollar shortages. External payments were not in crisis, but Cairo's attempts to curb demand for foreign exchange convinced some investors and currency traders that government financial operations lacked transparency and coordination. Monetary pressures have since eased, however, with the 1999-2000 higher oil prices, a rebound in tourism, and a series of mini-devaluations of the pound. The development of a gas export market is a major plus factor in future growth. |
2000 January
Economy - overview | A series of IMF arrangements - coupled with massive external debt relief resulting from Egypt's participation in the Gulf war coalition - helped Egypt improve its macroeconomic performance during the 1990s. Through sound fiscal and monetary policies, Cairo tamed inflation, slashed budget deficits, and built up foreign reserves. Although the pace of structural reforms - such as privatization and new business legislation - has been slower than the IMF envisioned, Egypt's steps toward a more market-oriented economy have prompted increased foreign investment. Lower combined hard currency inflows - from tourism, worker remittances, oil revenues, and Suez Canal tolls - in 1998 and the first half of 1999 resulted in pressure on the Egyptian pound and sporadic dollar shortages, but external payments were not in crisis. Despite ample reserves, the Central Bank did not provide sufficient hard currency to commercial banks and Cairo restricted imports for a short period; these developments confirmed to some investors and currency traders that government financial operations lack sufficient coordination and openness. Monetary pressures have since eased, however, with the continued oil price recovery starting in mid-1999 and a moderate rebound in tourism. Increased gas exports are a major plus factor in future growth. |
|
|
|
This page was last updated on 8 July, 2008 |
|
|
Home 
Fields
World Records
World Dictionary
Geographic Names
Fields History
Chiefs of State
Intl. Organizations
Intl. Environmental Agree.
Other References
Notes and Definitions
