economics
A Detailed analysis of Egypt's economic progress over the last decade whilst analyzing the effect of privatization on the Egyptian economyEgypt is the third-largest economy in the Middle East and North Africa region (after Saudi Arabia and Israel), as well as one of the strongest, with significant potential for future economic growth and diversification. With a real commitment to economic reform, which encompasses a large privatization program and the encouragement of private investment and growth in the private sector, the attractions for both foreign direct investors and portfolio investors continue to increase. In my analysis I will first analyze the Egyptian economy in order to present a solid overview and background on which I will then base my own analysis on the effect of privatization on the Egyptian economy.The Egyptian economy is the third largest in the MENA region (after Saudi Arabia and Israel) and is set to grow sharply as the effects of economic reform continue to kick in. Economic growth in the year to the end of June 1999 reached 5.7%, and should improve in the current year to reach 6%. While budget deficit is set to fall to 1.1% of GDP, the
While the construction sector should benefit significantly from the Toshka project, the issue for some critics is that the project depends on water from Lake Nasser-water which flows through many other states and which in the future may not be so free flowing. But with a number of local and foreign commentators criticizing government policy on the currency issue, the market is waiting for news on action at the central bank. As a result, the informal peg against the US dollar-against which the Egyptian pound has been technically over-valued over the decade-has been called into question. The government has also made it clear that there will be a full privatization of all state holdings in the cement and gas distribution sectors. -and looks set to remain so- Egypt had a poor record on inflation until a few years ago, as the chart below shows. 0% and for a developing economy which requires domestic investment to expand industry. Economic drivers The opening of the banking sector has been significant The drivers of the economy have altered somewhat over the last decade, as the economy has increasingly become free from limitations imposed by nationalization. The sector has also expanded rapidly, with a number of foreign banks buying stakes in domestic banks as part of the privatization program. With 95% of the population living on just 5% of the land, much of Egypt is severely underdeveloped, and it is hoped that this project will change that. The rise in oil prices and the sharp increase in tourism arrivals and revenues should help to keep the current account in check. The contribution to GDP from government and social/other services is therefore unlikely to alter significantly in the short term, although the government will look to squeeze spending in the medium term. The increasing arrival of global businesses in Egypt through direct investment is also adding to growth and encouraging domestic companies to gear up both investment and overall strategy to fight increased competition. Nevertheless, the market share of these four banks should result in them being well received by investors domestically and overseas. Economic StructureThe Egyptian economy is relatively well diversified, although the importance of sectors such as agriculture signal that Egypt is still a developing economy. However, a marked recovery in oil prices and tourist numbers has resulted in many believing that the crisis is a short-term one only.
Common topics in this essay:
Ministry Economy,
GDP June,
Pound Growth,
Lake Nasser-water,
North Africa,
Construction Construction,
Arabia Israel,
Prime Minister,
GDP Egypt,
Inflation Inflation,
central bank,
egyptian pound,
egyptian economy,
current account,
budget deficit,
foreign exchange,
short term,
economic growth,
foreign exchange reserves,
finance insurance,
trade finance,
trade finance insurance,
structural adjustment program,
current account deficit,
finance insurance sector,
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Acceptance Essays
