Egypt economy

Source: Bloomberg

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. Continue reading »

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. Continue reading »

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. Continue reading »

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. Continue reading »

Egypt in numbers

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 ChapmanContinue reading »

A bit of good news for Egypt: rating agency Standard and Poor’s upgraded the country’s credit rating on Friday on foreign long-term borrowings to ‘B-’ from ‘CCC+’.

In other words, Egypt is considered as now having the capacity to meet its financial oblogations, as opposed to being “vulnerable”. Up is the way to go. Continue reading »

By Dalibor Rohac of the Cato Institute

Following the military takeover and the bloody crackdown on the followers of the Muslim Brotherhood, Egypt has been living through intermittent violence and unrest. Incidence of violence directed against the country’s Coptic minority seems to be on the rise, as does the activity of Islamists operating in the Sinai Peninsula. In short, this seems to be a very odd moment to discuss the arcane details of Egypt’s subsidy programmes.

However, the problem of energy and food subsidies is one of the most significant challenges facing Egypt today. Regardless of what political future looms for Egypt, a reform of subsidies is necessary to avert an approaching economic catastrophe. Continue reading »

By Anthony Skinner of Maplecroft

The Egyptian economy is being propped up by loans, grants, direct deposits and fuel shipments worth billions of dollars from Saudi Arabia, Kuwait and the United Arab Emirates following the toppling of former president Mohamed Morsi and removal from power of the Muslim Brotherhood (MB) in July this year.

Although such aid has allowed Egypt’s authorities to launch ambitious spending on infrastructure to jump start the economy, it also allows them to postpone painful but necessary structural reforms. Continue reading »

The news out of Egypt may seem unremittingly bad of late but here’s something to cheer equity investors: the benchmark Cairo index, the EGX30, is back above 6,000 points this week, a level not seen since before the toppling of former president Hosni Mubarak way back in January 2011.

In fact, the EGX30 was one of the best performing indices worldwide in the third quarter this year, rising 20.5 per cent. Nevertheless, its new high may be little more than symbolic. Continue reading »

As the FT reports, the US has suspended part of its aid to Egypt in an effort to put pressure on the military to move towards democracy. It comes after months of uncertainty from the US over how to react to the ousting/coup of president Mohamed Morsi. As they say, money talks.

But the move is largely symbolic – the sums involved barely equate to 2 per cent of the $14bn in funding the country has secured from Gulf countries since Morsi was removed. What is really hurting Egypt more is the drop in tourism. The fall in visitors just from the Americas over the last two years has hurt more than the State Department action. Continue reading »

By Elizabeth Stephens of JLT Specialty

Investor confidence and the prospects for international businesses operating in Egypt have reached an all time low as the potential for disintegration has become clear. Aid from neighbouring states has helped but it is uncertain and will not address longer term problems. Continue reading »

By Dalibor Rohac of the Cato Institute

In Egypt, violent Islam is on the rise. This week, two bomb blasts in Sinai killed six military officers. Last week, the convoy of the interior minister was hit by a bomb attack in Cairo. Besides political violence by fringe Islamist groups, Egyptians are bracing for more repression from the government. Two and half years since the Arab Spring, Egypt’s ‘deep state’ is back in full form, arresting the opposition and cracking down on independent media.

Although many competing accounts exist of why Egypt’s transition has failed – ranging from the country’s religious divisions to its authoritarian legacies – one should not underestimate the power of the simplest one. What if it’s all about the economy? Continue reading »

By Dalibor Rohac of the Cato Institute

Senators John McCain and Lindsey Graham might be personae non gratae in Egypt but their call to stop US aid to the Egypt is fully justified. The story of Egypt displays all the pathologies commonly described the critics of foreign aid: waste, unintended consequences and the emergence of a culture of dependence and policy inertia.

This should not come as a surprise given that the aid – coming from the US, Europe or from the Gulf – has not been motivated by economic reasons but rather by the political importance of Egypt as the most populous Arab country. Continue reading »

Tough times in Egypt: on top of all the political turmoil, the latest manufacturing index has fallen off a cliff to its second-lowest since the numbers began.

The Markit/HSBC purchasing managers’ index came in at a lowly 41.7 in July, down from 47.5 in June (50 marks the border between expansion and contraction) The longer the political uncertainly goes on, the harder it will be for Egypt to recover. Continue reading »

Egypt’s turmoil has turned violent, with the 40-plus deaths of supporters of the deposed Islamic president. The Muslim Brotherhood has called for an uprising.

Markets are no more stable. On Friday, rating agency Fitch weighed in, downgrading the country’s foreign credit rating. The EGX30 share index has fallen 3.6 per cent on Monday. Yet at the same time, bond yields and the price of default insurance, which had previously surged, have come back down to levels prior to the ousting of Mohamed Morsi. The markets seem as confused as the people. Continue reading »