The IMF has endorsed Egypt’s economic reforms at the conclusion of an Article IV mission, giving Cairo a much-needed boost as it prepares to host a major investment conference in March aimed at attracting billions of dollars into large projects in a range of sectors.
“Policies implemented so far, along with a return of confidence, are starting to produce a turnaround in economic activity and investment,” said Chris Jarvis, who led the IMF mission. “We now project that growth will reach 3.8 per cent in [the financial year] 2014/2015.” Read more
Stability and bold new reforms after a period of political and economic turmoil will yield Egypt GDP growth of 3.5 per cent in the year to 2015 and 5 to 6 per cent thereafter, according to Renaissance Capital.
Last week, Egypt posted GDP growth of 2.2 per cent for the year to June 2014. That is inadequate for a country with high unemployment and a youthful population. But the GDP figures also hinted at substance behind the hope that has surged through Egypt since President Fattah al-Sisi came to power earlier this year: in the three months to June, GDP rose 3.7 per cent. Read more
After 100 days in power, Egypt’s president Abdel Fattah al-Sisi has been given a cautious thumbs up by economists.
Al-Sisi, a former defence minister, won a landslide victory in Egypt’s presidential race on May 24, almost a year after he led the coup that ousted Mohammed Morsi, the elected Islamist president, from power. Political turbulence has been bruising for Egypt’s economy, which by most measures is in a worse state than it was before the advent of the Arab Spring in 2011. Read more
It is not hard to find evidence of Egypt’s extensive informal economy. It is present everywhere from the rickety microbuses that are poor Egyptians’ main means of transport, to the myriad small businesses which repair, build, supply and otherwise serve the needs of this population of some 85m people.
A World Bank report on the Egyptian labour market released on Wednesday, finds that informality in employment has been deepening, meaning that the proportion of Egyptians in poor-quality jobs without written contracts or social security has been rising, even during years of higher economic growth in the past decade. Read more
By Dalibor Rohac, Cato Institute
Abdel Fattah el-Sisi’s landslide victory in the presidential race, with over 93 per cent of the popular vote, is a result not only of his undeniable popularity among some parts of the Egyptian public, but also of the repression of media and political competition that preceded the election. Following the coup in July 2013, more than 16,000 people have been imprisoned, for crimes that included criticizing the military regime on Twitter.
If el-Sisi’s victory raises doubts about the future of democracy in Egypt, it also leaves unanswered a host of pressing economic concerns. By any account, Egypt’s economy is in a worse shape than before the events of the Arab Spring. The official unemployment rate in the first quarter of 2014 was at 13.4 per cent, up by 0.2 per cent relative to the same period last year. Compared to 2010, the number of unemployed has grown from 2.4m to 3.7m. Some 26 per cent of the population is living under the official poverty line, set at around $1.50 a day. Read more
With Egypt’s presidential election approaching fast, representatives from the Egyptian government and financial community travelled to London this week to seek support from international investors for the country’s much needed reform programme.
Speaking at an Egypt day event at the London Stock Exchange on Friday, Hany Kadry, Egypt’s foreign minister, said he hoped to see “massive participation” in the presidential election on May 26 and 27 and parliamentary polls that will follow in the autumn. Read more
Young Arabs are increasingly turning their backs on cushy public sector jobs in favour of working for private companies and starting their own businesses, a survey in 16 countries has found.
There has also been an erosion in optimism that the “Arab spring” uprisings in recent years against authoritarian governments across the region will translate into better lives for ordinary people, the survey found. Read more
Who says military rule is bad for stock markets? The EGX30, Egypt’s main stock index, is now over 7,700 – a level not seen since mid-2008.
The index has surpassed the previous post-Lehman high before the removal of president Mubarak, which was just over 7,600 in April 2010. Read more
Cemex, the Mexican cement giant, is breathing a little sigh of relief.
It had been biting its nails ahead of a ruling from an Egyptian appeals court on whether its 1999 purchase, in a privatisation, of Assiut Cement Company (ACC), should stand. Read more
By Richard Asquith of TMF Group
It has been a difficult three years for Egypt, both politically and economically. The euphoria following the toppling of President Mubarak has given way to violent turmoil and a sharp decline in the country’s traditional economic drivers: exports, FDI and tourism. GDP growth has fallen from 7 per cent in 2009 to just over 1 per cent today and, with unemployment rising to over 13 per cent and a national debt equivalent to 89 per cent of GDP, major economic surgery is required. Read more
The Arab Spring is officially over, at least as far as Egyptian equities are concerned.
In a milestone of sorts, Egypt’s benchmark EGX30 stock index on Tuesday hit a new three-year high, surpassing for the first time its level on January 14, 2011. That was the day when a popular uprising felled Tunisian leader Zine el Abidine Ben Ali and set off frenzied speculation about which Arab leader would be next to fall.
Source: S&P Capital IQ
Egyptians queue up to cast their vote on a new constitution in Al-Haram in the southern Cairo Giza district on January 14, 2014.
Egypt goes to the polls – again. This time on a new constitution, which would give the military freedom from civilian oversight. Here are the main news and views. Read more
By Dalibor Rohac of the Cato Institute
How does one save an economy on the brink of bankruptcy? In Egypt, the answer seems to be a stimulus plan. Egypt’s finance minister, Ahmed Galal, announced that starting in January the government will increase the planned stimulus package by 25 per cent to a total of $4.36bn.
All of this is happening at a time when the country’s budget deficit is at 14 per cent of GDP, and the growth in public debt – currently at 87.5 per cent of GDP – is out of control. Read more
A graphic look at Egypt's economy | Click to enlarge
With the military reoccupying centre stage in Egypt, what does this mean for democracy and the economy? Since the July ouster of President Mohamed Morsi, detentions have continued and more than 1,000 of his Muslim Brotherhood supporters have been killed. The FT’s special report on Egypt takes a hard look at the country’s political and economic future, writes Peter Chapman. Read more