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Egypt is the third largest economy in the Arab world. 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 opened up considerably under
former Presidents Anwar EL-SADAT and Mohamed Hosni MUBARAK.
Cairo from 2004 to 2008 pursued business climate reforms to attract
foreign investment and facilitate growth. Poor living conditions and
limited job opportunities for the average Egyptian contribute to
public discontent, a major factor leading to the January 2011
revolution that ousted Mubarak. The uncertain political, security, and
policy environment since 2011 caused economic growth to slow
signifi cantly, hurting tourism, manufacturing, and other sectors and
pushing up unemployment.
Weak growth and limited foreign exchange earnings have made
public fi nances unsustainable, leaving authorities dependent on
expensive borrowing for defi cit fi nance and on Gulf allies to help
cover the import bill. In 2015, higher levels of foreign investment
contributed to a slight rebound in GDP growth after a particularly
depressed post-revolution period.
Economic Sector:
The Egyptian economy is one of the Middle East's most versatile economies,
which the sectors of agriculture, industry, tourism and services engaged in
comparable proportions in its basic configuration. The Egyptian economy
depends basically on agriculture, Suez Canal revenues, tourism, taxation,
cultural and media production, petroleum exports and remittances of more
than three million Egyptians abroad, mostly in the Gulf States, the United
States, Europe and Australia.
1) Services are the most important sector of the economy and account for
around 47.5 percent of total GDP.
The most important segments within Services are
Macroeconomic trend:
Egypt has a rather stable mixed economy enjoying average growth,
averaging 3%5% in the past quarter-century. The economy embarked on
various stages of development during which the public and private sectors
played roles varying in relative importance as follows:
There are several stages in the Egyptian economy since 1952. They can be
summarized as follows:
1st Phase - 19521966:
Import substitution and nationalization, for which the first program of
industrialization was launched in 1957, was led by the public sector in heavy
industries such as iron, steel and chemical industries. Nationalization
reduced the relative importance of the private sector.
Budget in Brief:
Total Expenditure : 864.5 Billion EGP
FY 2014/15
4.2%
10.8%
FY 2015/16
5%
8.9%
12.8%
13%
11.5%
11%
12.8
14
13
10.8
12
11.5
11
10
8.9
8
6
4.2
4
2
0
FY 2014/15
FY 2015/16
Other; 8%
Real Estate Tax; 1%
Non-Tax
Revenues
Non-Tax
Non-Tax Revenues; 32%
Other; 6%
Purchase of Goods and Equipment; 5%
Interest Payment; 28%
Public Investment; 9%
Wages; 25%
109.70
61.70
49.20
37.80
31.10
52.50
25.30
11.40
13.8
12.4
10.8
8.9
Egypt has a long tradition of deficit budget which is not changed in FY15-16
budget. This fiscal year the deficit in national budget is 251.09 EGP bn. But,
in recent years, especially after the takeover of President El Sisi, there is a
positive reduction is seen in the amount of the deficit. The trend of deficit in
national budget after from the era of Mubarak to El Sisi is summarized and
presented in the following chart in terms of percentage of GDP-