Review of Egypt Economy

Published: 03/24/2010

The government of President Mubarak drives the transition underway in Egypt by a state-directed economy to a market economy, actively progressing through comprehensive economic reforms. Egypt to South Africa is today the most industrialized country in Africa (the industry now 35 percent share of GDP), but agriculture has a share of 15 percent is still an important foundation of the economy. The services sector accounts for half of GDP.
The Egyptian economy is heavily dependent on external influences. Main resources of the country are the promotion and export of fossil fuels (oil and natural gas), the income from tourism, remittances from Egyptian workers abroad and the revenue from the Suez Canal. Sector priorities of the Egyptian economy are: textiles, automotive, medical and marine.

Fossil fuels

Natural gas production was increased in the last five fiscal years by more than two-thirds to 69 billion cubic meters. After 24 reports of success in 2009 with exploration drilling, proven natural gas reserves are now indicated with 77.2 trillion cubic feet (tcf). Egypt did so for only a very small share of global reserves
(About one percent), but it is one of the 20 largest natural gas producer Welt.Nachdem the oil production by 2009 more than 15 years was continuously decreased slightly, is expected again for 2010 with a funding of approximately 720,000 barrels per day. For comparison: In 1990, the flow rate was still 941,000 barrels a day. The export earnings in accordance with the proportional increase in 2008 due to the phased extremely high world oil prices fell again in 2009 to eleven billion U.S. dollars (= 7.6 percent of GDP). After 40 new discoveries of oil reserves increased in 2009 according to official figures of 4.4 billion barrels. The reserves of fossil fuels in Egypt are limited, forecasts predict a drying up of sources to the latest 2040th

Tourism

The tourism sector, which generates nearly 20 percent each of total foreign exchange earnings of Egypt and providing the jobs, was of the international recession and the effects of swine flu affected moderately. The abduction of a group of tourists in the Gilf El Kebir in 2008 and the explosion in the old city of Cairo in the spring of 2009 led to any significant drops. In 2009 the tourism industry generated 10.76 billion U.S. dollars foreign exchange (minus two percent), which still corresponds to approximately eleven percent of GDP. Germany lost 1.2 million tourists unchanged with his second place in the statistics of the countries behind Russia in 2009 (over two million) back to the UK (1.36 million), but remained well ahead of Italy (1 million).

An international marketing campaign ("Egypt ... where it all begins"), the commissioning of the ultra-modern Terminal 3 at Cairo Airport to summer 2009, the modernization of other terminals and the expansion of all major airports in the country contribute to 2011 14 Millones to bring tourists to Egypt by 2022 even 25 million.

The Suez Canal

The fourth major foreign exchange earner for Egypt, the Suez Canal, suffered in 2009 mostly under the influence of global economic crisis: Strong fallen World Trade flows have resulted in declines of 20 percent, both down on the number of vessels as well as the revenue from user charges. The cases of piracy off Somalia vera laste many shipowners to take the longer route around the Cape which Egypt had suffered significant einbusen. After record levels in the number of vessels, and the revenue in August 2008 was reached after only six months in February 2009, the low point. Since then, again a clear upward trend is evident in December 2009 has already returned to almost the same level as in late 2008.

Financial Kriese in Egypt?

Egypt seems to be the impact of the global economic crisis have largely survived. The main indicators currently still give off a mixed picture, but the trend shows clearly again the top.

The inflation rate last year at nine percent. By January 2010, inflation rose in the wake of demand-digit price increases again to 13.6 percent.
Thus, the values increased for economic growth in early 2009 again steadily. The financial year 2008/09 have been closed at 4.7 percent until the end of 2009 equaled 5.1 percent, one in the regional and global comparison of very good value. The two launched by the government fiscal Konunkturpakete with a total of 4.1 billion U.S. dollars have helped to prevent a recession. With the government investment jobs were created, created income, stimulated domestic demand and thus again be moved to production increases.

Agriculture and topography

Egypt is not able to feed its inhabitants, it must be many foods are imported. Due to the large imports of food and fewer exports of manufactured goods, many debts incurred by the country. Many rural areas in Egypt can not be used because no water, rivers or ponds are sufficiently available. Through the newly-built Aswan Dam, the Nile overflows barely, leading to a barren harvest to the shores of Egypt. Exports from Egypt are mainly cotton, oil and aluminum. This can not be produced in Egypt and exports sufficiently to run less often, this leads to over-indebtedness of their own country. There have many tons of wheat are imported to produce, more than at home can be grown and harvested. Typical food from the land are millet, cabbage and beans. But Egypt does not import only but it is also known for its export, the hookah, which is smoked in Egypt for reasons of tradition you. The shisha is therefore one important component as part in the economy of Egypt.