Key FACTS about Egypt
- Full name:
Arab Republic ofEgypt - Capital:
Cairo - Population: 80.3 million
- Area: 1 million sq km
- Major language: Arabic
- Major religions: Muslim 90% , Coptic 9% & other Christian 1%
- Currency: Egyptian Pound
- Main exports: Petroleum, petroleum products, cotton, Textile, Metal product and Chemicals.
- Geographical Location: Northern Africa, bordering the Mediterranean Sea, between Libya and the Gaza Strip, and the Red Sea north of Sudan, and includes the Asian Sinai Peninsula
To make an external scanning on Egypt, we have to know what characterizes the political, economical, sociocultral and technological environments in Egypt.
Economical Environment:
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Occupying the northeast corner of the African continent, Egypt is bisected by the highly fertile Nile valley, where most economic activity takes place. Egypt's economy was highly centralized during the rule of former President Gamal Abdel NASSER but has opened up considerably under former President Anwar EL-SADAT and current President Mohamed Hosni MUBARAK. Cairo from 2004 to 2008 aggressively pursued economic reforms to attract foreign investment and facilitate GDP growth, but is postponing further economic reforms because of global economic turmoil. With the installation of the 2004 Egyptian parliament, the Government of Egypt began a new reform movement, following a stalled economic reform program begun in 1991, but moribund since the mid-1990s.
In the past year, the cabinet economic team has simplified and reduced tariffs and taxes, improved the transparency of the national budget, revived stalled privatizations of public enterprises and implemented economic legislation designed to foster private sector-driven economic growth and improve Egypt's competitiveness. Despite these achievements, the economy is still hampered by government intervention, substantial subsidies for food, housing, and energy, and bloated public sector payrolls. Moreover, the public sector still controls most heavy industry.
The international economic downturn slowed Egypt's GDP growth to 4.5% in 2009, predominately affecting export-oriented sectors, including manufacturing and tourism. Unemployment is rising. In 2009 the government implemented a $2.7 billion stimulus package favoring infrastructure projects and export subsidies, and is considering up to $3.3 billion in additional stimulus spending in 2010 to mitigate the slowdown in economic growth.
In September 2009 - Egypt was ranked among the world’s 10 most active reformers for the fourth time. The country moved up to 106 from 116 among 183 economies worldwide in the overall ease of doing business ranking. According to the recently released report by IFC and the World Bank “Doing Business 2010: Reforming through Difficult Times”, Egypt made business start-up less costly, expedited the construction permit process, expanded the information available from the private credit bureau, and created commercial courts to speed up contract dispute settlements.
Being a former global leading reformer and a regional leading reformer in 2008/09, Egypt continued to make it easier to deal with construction permits by issuing executive articles for the 2008 construction law and eliminating most preapprovals for construction permits. Contract enforcement was expedited with the creation of commercial courts. Access to credit information has expanded with the addition of retailers to the database of the private credit bureau. Finally, company start-up was eased by the removal of the minimum capital requirement.
Facts and figures on the Egyptian economy:
| GDP (purchasing power parity): $470.4 billion (2009 est.) country comparison to the world: 27 $450.1 billion (2008 est.) $419.9 billion (2007 est.) | GDP (official exchange rate): $188 billion (2009 est.) | GDP - real growth rate: 4.5% (2009 est.) country comparison to the world: 29 7.2% (2008 est.) 7.1% (2007 est.) | GDP - per capita (PPP): $6,000 (2009 est.) country comparison to the world: 133 $5,800 (2008 est.) $5,500 (2007 est.) |
| GDP - composition by sector: agriculture: 13.1% industry: 37.7% services: 49.2% (2009 est.) | Labor force: 25.8 million (2009 est.) country comparison to the world: 21 | Labor force - by occupation: agriculture: 32% industry: 17% services: 51% (2001 est.) | Unemployment rate: 9.7% (2009 est.) country comparison to the world: 113 8.7% (2008 est.) |
| Population below poverty line: 20% (2005 est.) | Household income or consumption by percentage share: lowest 10%: 3.9% highest 10%: 27.6% (2005) | Distribution of family income - Gini index: 34.4 (2001) country comparison to the world: 90 | Investment (gross fixed): 17.9% of GDP (2009 est.) country comparison to the world: 121 |
| Budget: revenues: $48.86 billion expenditures: $61.61 billion (2009 est.) | Public debt: 79.8% of GDP (2009 est.) country comparison to the world: 15 86.5% of GDP (2008 est.) | Inflation rate (consumer prices): 10.1% (2009 est.) country comparison to the world: 193 18.3% (2008 est.) | Central bank discount rate: 11.5% (31 December 2008) country comparison to the world: 48 9% (31 December 2007) |
| Commercial bank prime lending rate: 11.82% (31 December 2008) country comparison to the world: 67 12.51% (31 December 2007) | Stock of money: $31.72 billion (31 December 2008) country comparison to the world: 27 $27.6 billion (31 December 2007) | Stock of quasi money: $112.2 billion (31 December 2008) country comparison to the world: 21 $102.6 billion (31 December 2007) | Stock of domestic credit: $126.5 billion (31 December 2008) country comparison to the world: 35 $113.9 billion (31 December 2007) |
| Market value of publicly traded shares: $85.89 billion (31 December 2008) country comparison to the world: 43 $139.3 billion (31 December 2007) $93.48 billion (31 December 2006) | Agriculture - products: cotton, rice, corn, wheat, beans, fruits, vegetables; cattle, water buffalo, sheep, goats | Industries: textiles, food processing, tourism, chemicals, pharmaceuticals, hydrocarbons, construction, cement, metals, light manufactures | Industrial production growth rate: 3.9% (2009 est.) country comparison to the world: 30 |
| Current account balance: $-3.32 billion (2009 est.) country comparison to the world: 160 $-1.331 billion (2008 est.) | Exports: $22.91 billion (2009 est.) country comparison to the world: 64 $29.85 billion (2008 est.) | Imports: $43.98 billion (2009 est.) country comparison to the world: 48 $56.62 billion (2008 est.) | Reserves of foreign exchange and gold: $34.99 billion (31 December 2009 est.) country comparison to the world: 27 $33.85 billion (31 December 2008 est.) |
| Debt - external: $28.45 billion (31 December 2009 est.) country comparison to the world: 60 $32.12 billion (31 December 2008 est.) | Stock of direct foreign investment - at home: $66.43 billion (31 December 2009 est.) country comparison to the world: 44 $59.13 billion (31 December 2008 est.) | Stock of direct foreign investment - abroad: $12.23 billion (31 December 2009 est.) country comparison to the world: 43 $12.08 billion (31 December 2008 est.) | Exchange rates: Egyptian pounds (EGP) per US dollar - 5.6 (2009), 5.4 (2008), 5.67 (2007), 5.725 (2006), 5.78 (2005) |
Source: CIA the world fact book - USA
Egypt Risk Assessment
Rating: BRisk Assessment
The economy grew strongly in 2007 driven by domestic demand. The government's liberal approach since 2004 has fostered a climate of confidence conducive to consumption and investment. The economy has also benefited from oil country boom via their investments and emigrant worker remittances. In this context, the business environment is improving with the Coface payment incident index remaining below the world average. While the gas sector has continued to develop, manufacturing, construction, tourism, and communications have achieved excellent performance. The outlook for 2008 is bright with growth likely to reach between 7.0 and 7.5 per cent. .
The external financial situation remains healthy amid the good trend on foreign currency earnings and the increase in foreign direct investment fuelled by the privatizations. Debt service is low and Egypt is building up foreign exchange reserves. However, the fiscal deficit and public sector debt remain a source of concern. Controlling public spending and reducing the debt necessitates a spending overhaul that will take time. Regional conflicts and poverty have strengthened Islamist opposition movements. In this context social climate is tense and officials have exercised caution in pursuing reforms.
STRENGTHS The external financial situation remains healthy amid the good trend on foreign currency earnings and the increase in foreign direct investment fuelled by the privatizations. Debt service is low and Egypt is building up foreign exchange reserves. However, the fiscal deficit and public sector debt remain a source of concern. Controlling public spending and reducing the debt necessitates a spending overhaul that will take time. Regional conflicts and poverty have strengthened Islamist opposition movements. In this context social climate is tense and officials have exercised caution in pursuing reforms.
- The business climate has benefited from an active reform program and a regional economic boom.
- Egypt boasts diversified sources of foreign exchange (the Suez Canal, tourism, private transfers, and oil and gas exports).
- Foreign exchange reserves are high.
- The country enjoys the political and financial support of Western countries.
WEAKNESSES
- The interest on public debt and the cost of subsidies weighs on public finances limiting the capacity for infrastructure development.
- The banking system is not yet capable of meeting the economy's needs.
- The tourism sector, whose revenues are of fundamental importance to the current account balance and economic growth, remains vulnerable to the terrorist menace
Performance statistics: Source: The international Monetary Fund
| Subject Descriptor | Units | Scale | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |
| Gross domestic product, constant prices | National currency | Billions | 354.70 | 367.20 | 378.90 | 391.00 | 407.00 | 425.20 | 454.30 | 486.50 | 521.39 | 545.89 | 570.44 |
| Gross domestic product, constant prices | Annual percent change | 5.38 | 3.52 | 3.19 | 3.19 | 4.09 | 4.47 | 6.84 | 7.09 | 7.17 | 4.70 | 4.50 | |
| Gross domestic product, current prices | National currency | Billions | 340.10 | 358.70 | 378.90 | 417.50 | 485.30 | 538.50 | 617.70 | 744.80 | 896.50 | 1,038.60 | 1,182.62 |
| Gross domestic product, current prices | U.S. dollars | Billions | 99.16 | 95.40 | 87.51 | 81.38 | 78.80 | 89.79 | 107.38 | 130.35 | 162.62 | 187.96 | 208.46 |
| Gross domestic product, deflator | Index | 95.88 | 97.68 | 100.00 | 106.78 | 119.24 | 126.65 | 135.97 | 153.09 | 171.95 | 190.26 | 207.32 | |
| Gross domestic product per capita, constant prices | National currency | Units | 5,603.52 | 5,675.47 | 5,740.91 | 5,809.81 | 5,932.95 | 6,074.29 | 6,371.67 | 6,610.05 | 6,933.32 | 7,116.81 | 7,291.09 |
| Gross domestic product per capita, current prices | National currency | Units | 5,372.83 | 5,544.05 | 5,740.91 | 6,203.57 | 7,074.34 | 7,692.86 | 8,663.39 | 10,119.57 | 11,921.54 | 13,540.36 | 15,115.71 |
| Gross domestic product per capita, current prices | U.S. dollars | Units | 1,566.42 | 1,474.48 | 1,325.85 | 1,209.27 | 1,148.71 | 1,282.77 | 1,505.96 | 1,771.00 | 2,162.45 | 2,450.41 | 2,664.41 |
| Gross domestic product based on purchasing-power-parity (PPP) valuation of country GDP | Current international dollar | Billions | 247.52 | 262.03 | 274.76 | 289.63 | 309.65 | 333.35 | 367.76 | 405.11 | 443.43 | 471.51 | 500.25 |
| Gross domestic product based on purchasing-power-parity (PPP) per capita GDP | Current international dollar | Units | 3,910.25 | 4,049.93 | 4,162.96 | 4,303.62 | 4,513.88 | 4,762.12 | 5,157.97 | 5,504.17 | 5,896.67 | 6,147.12 | 6,393.94 |
| Gross domestic product based on purchasing-power-parity (PPP) share of world total | Percent | 0.59 | 0.60 | 0.60 | 0.60 | 0.59 | 0.59 | 0.60 | 0.62 | 0.64 | 0.66 | 0.67 | |
| Implied PPP conversion rate | National currency per current international dollar | 1.37 | 1.37 | 1.38 | 1.44 | 1.57 | 1.62 | 1.68 | 1.84 | 2.02 | 2.20 | 2.36 | |
| Inflation, average consumer prices | Index, 2000=100 | 100.00 | 102.43 | 104.92 | 108.28 | 117.06 | 127.36 | 132.71 | 147.25 | 164.48 | 191.20 | 207.36 | |
| Inflation, average consumer prices | Annual percent change | 2.85 | 2.43 | 2.43 | 3.21 | 8.11 | 8.80 | 4.20 | 10.95 | 11.70 | 16.24 | 8.45 | |
| Inflation, end of period consumer prices | Index, 2000=100 | 100.00 | 102.23 | 105.04 | 109.26 | 122.05 | 127.76 | 137.01 | 148.73 | 178.75 | 196.55 | 212.27 | |
| Inflation, end of period consumer prices | Annual percent change | 2.54 | 2.23 | 2.75 | 4.01 | 11.71 | 4.68 | 7.24 | 8.55 | 20.18 | 9.96 | 8.00 | |
| Population | Persons | Millions | 63.30 | 64.70 | 66.00 | 67.30 | 68.60 | 70.00 | 71.30 | 73.60 | 75.20 | 76.70 | 78.24 |
Technological Environment:
Egypt's IT spending is expected to increase from US$1.3bn in 2010 to US$2.1bn by 2014 and the Egyptian IT market growth is forecasted to remain below pre-economic crisis levels in 2010, but economic recovery, tenders delayed from 2009 and higher incomes boosted by pay raises for civil servants and other groups should help to keep sales on an upwards trajectory. .
A number of policies have been implemented to attract foreign investment in IT outsourcing, including local employment subsidies, lower corporate taxes and deductions for training costs. The Egyptian minister of state for administrative development has said that 200 government services will soon be available online through a new e-government portal. The portal will offer 70 services in both English and Arabic. According to the Ministry for Administrative Development, more than 20 government agencies currently offer services and licenses online. .
Egypt's computer hardware sales are projected at US$821mn in 2010 and are forecast to reach around US$1.3bn in 2014.Egypt
A number of policies have been implemented to attract foreign investment in IT outsourcing, including local employment subsidies, lower corporate taxes and deductions for training costs. The Egyptian minister of state for administrative development has said that 200 government services will soon be available online through a new e-government portal. The portal will offer 70 services in both English and Arabic. According to the Ministry for Administrative Development, more than 20 government agencies currently offer services and licenses online. .
Egypt's computer hardware sales are projected at US$821mn in 2010 and are forecast to reach around US$1.3bn in 2014.
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