Business Environment in Egypt
With the establishment of a new government in July 2004, Egypt launched an economic reforms program, including a large stimulus plan in 2008. Consequently, tariffs and taxes were lowered and simplified. The transparency of the national budget was reinforced and many privatizations were initiated. This new policy bore its fruits as growth reached a level of more than 5% in 2009 and 2010, especially thanks to the resumption of private and public consumption. The construction, communications, wholesale and retail sectors, catering and hospitality, as well as manufacturing contributed to the development of economic growth. However, the year 2010 was marked by an under-performance of the sectors which most strongly contribute to the country’s GDP, namely agriculture and mining. The IMF growth estimates for 2011 are between 5.5% and 5.8%, counting on the increase in consumption, recovery of foreign growth (tourism and the Suez Canal) and a resumption of investments.
Although the Egyptian economy has entered into a cycle of progressive growth, its level of growth remains insufficient to maintain employment and reduce the share of population living below the poverty of line (18%). In addition, the country faces a high rate of inflation (about 10%). Foreign accounts, weakened during the crisis by a decline in foreign exchange earnings and net capital flows, have recovered and the trade balance returned to surplus in 2010.
|GDP (billions USD)||188.61||218.47||231.11e||251.87e||273.33e|
|GDP (Constant Prices, Annual % Change)||4.7||5.1||1.0e||4.0||5.0e|
|GDP per Capita (USD)||2,456e||2,789||2,892||3,090||3,288e|
|Inflation Rate (%)||16.2||11.7e||11.5e||12.0||9.8e|
|Unemployment Rate (% of the Labor Force)||9.4e||9.2e||9.2e||9.1e||9.1e|
|Current Account (billions USD)||-4.42||-5.52e||-5.30e||-5.52e||-|
|Current Account (in % of GDP)||-2.4||-2.6||-2.1||-2.0||-|
Source: IMF - World Economic Outlook Database
Note: (e) Estimated Data
Main Sectors of Industry
Agriculture contributes around 13% of the GDP and employs about a third of the active population. The warm climate and the abundant Nile water allows for several annual harvests. The main crops are cereals, cotton, sugar cane and beets.
Egypts remains a country with little industry. With its diverse natural reserves (gold, minerals, iron, oil and gas), oil and gas-related activities and the secondary sector account for just over a third of the GDP. Egypt is the world’s sixth largest exporter of natural gas.
Finally, the tertiary sector represents around 50 % of the Egyptian GDP. It is largely dominated by revenues from telecommunications (which grew by 11% during the first quarter of 2010) and from tourism (the tourist industry brings about 11b in annual revenues. For example Cairo received 14m of visitors in 2010).
In spite of its economy’s diversification, the country still depends for a large part of its income on the Suez Canal (380m during the first quarter of 2010).
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||31.2||22.0||46.6|
|Value Added (in % of GDP)||13.7||37.3||49.0|
|Value Added (Annual % Change)||3.2||5.7||4.3|
Source: World Bank - Last Available Data.
|Egyptian Pound (EGP) - Average Annual Exchange Rate For 1 USD||6.20||5.78||5.73||5.64||5.43|
Source: World Bank
Indicator of Economic Freedom
- Mostly unfree
- World Rank:
- Regional Rank:
Foreign Trade in Figures
The Egyptian market is gradually opening up, especially after signing an agreement with the European Free Trade Association (EFTA) in 2006, and a free trade treaty with the United States. Its three primary export partners are the European Union, which represents more than a third of the trade, United States and Syria. The EU and the USA absorb almost 60% of egyptian exports. Egypt mainly exports mineral fuels and oil, cotton, iron and steel. It imports mainly consumer electronic goods and capital goods, nuclear reactors and nuclear-powered boilers, cereals, food products and chemical products. Import volume has doubled and is twice the export volume, a fact which contributed to the deterioration of the country's trade balance, now a deficit (USD 25.1b in 2010)
|Foreign Trade Indicators||2006||2007||2008||2009||2010|
|Imports of Goods (million USD)||27,300||37,100||48,382||44,946||52,923|
|Exports of Goods (million USD)||16,728||19,224||26,224||23,062||26,438|
|Imports of Services (million USD)||10,288||13,088||16,335||12,765||12,659|
|Exports of Services (million USD)||15,834||19,660||24,668||21,302||23,762|
|Imports of Goods and Services (Annual % Change)||21.8||28.8||26.3||-17.9||-|
|Exports of Goods and Services (Annual % Change)||21.3||23.3||28.8||-14.5||-|
|Imports of Goods and Services (in % of GDP)||31.6||34.8||38.6||31.9||-|
|Exports of Goods and Services (in % of GDP)||29.9||30.3||33.0||25.0||-|
|Trade Balance (million USD)||-8,438||-14,900||-19,759||-16,818||-|
|Trade Balance (Including Service) (million USD)||-3,873||-9,299||-12,462||-||-|
|Foreign Trade (in % of GDP)||61.5||65.1||71.7||56.9||-|
Source: WTO - World Trade Organization ; World Bank
Main Partner Countries
(% of Exports)
|United Arab Emirates||2.3%|
|Other partnersClose extended list||69.1%|
(% of Imports)
|Other partnersClose extended list||64.2%|
Sources of General Economic Information
Ministry of Finance
Ministry of Investment
Ministry of Trade and Industry
- Statistical Office
Central Agency for Public Mobilization and Statistics.
- Central Bank
- Stock Exchange
Cairo and Alexandria Stock Exchange
- Search Engines
- Economic Portals
Zawya: website containing economic information on the Middle East.
Alibaba: Economic portal on the Middle East.
- Executive Power
- The president is the head of state. He is elected by universal suffrage for a 6-year term of office (no limit for extension). He appoints the Prime Minister who must be approved by a confidence vote in the parliament. The President also appoints the head of the Council of Ministers. He can dissolve the Assembly and rule by decree. He holds almost total power.
- Legislative Power
- The legislative power is bicameral. The Parliament is formed by the People's Assembly (the lower house) which has 454 members (of which 444 are elected by universal suffrage and 10 are nominated by the President for a 5-year term) and the Advisory Council (the upper house) which plays only an advisory role and which has 264 members (of which 176 are elected by universal suffrage and 88 appointed by the president for a 6-year term). The president can dissolve the People's Assembly only if he has the support of the people during a referendum.
- Main Political Parties
- The multi-party system was restored in 1976 by the then president Sadate. However, in practice it is the ruling National Democratic Party (NDP) which completely dominates the political arena. The Muslim brothers, a brotherhood created in 1928 by Hassan El Banna is the main opposition party of the country. They were banned but in spite of it, they were able to win 88 seats in the People's Assembly in the 2005 elections. The other opposition parties like Wafd, El-Ghad or the Nasserian Party are minority parties and were nearly wiped out in the 2005 elections.
- Current Political Leaders
- Vice-President: Vacant
Prime Minister: Ahmad Shafiq
- Next Election Dates
- Presidential: in 2011
People's Assembly: November-December 2015
Advisory Council: in 2013
Indicator of Freedom of the Press
- World Rank:
- 3 places up compared to 2008
Indicator of Political Freedom
- Not Free
- Political Freedom:
- Civil Liberties:
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