Egypt Economy Continues Economic Progress

Egyptian authorities revised its previous GDP fiscal year estimate of 5.0 to 5.5 percent amid renewed infrastructure investments, according to Reuters. The economy grew 4.2 percent in the 2014/15 fiscal year, expanding 2.2 percent since last year, and investments comprised over 14 percent of GDP.  Egypt also plans to boost exports by 15 percent for 2016 in wake of Russian sanctions against Turkey.

Egyptian authorities revised its previous GDP fiscal year estimate of 5.0 to 5.5 percent amid renewed infrastructure investments, according to Reuters. The economy grew 4.2 percent in the 2014/15 fiscal year, expanding 2.2 percent since last year, and investments comprised over 14 percent of GDP.  Egypt also plans to boost exports by 15 percent for 2016 in wake of Russian sanctions against Turkey.

Egypt underwent political and social turmoil in the past few years as the country suffered through numerous coups, with major trouble starting when President Hosni Mubarak was overthrown in 2011, but continuing with President el-Sisi’s aims to get the country on stable footing through foreign investment.

To draw more investors, Egypt plans to pay back over $500 million to foreign investors after suffering a dollar shortage at auctions. Economists have traced the shortage to a 2015 policy meant to restrict the circulation of dollars on the black market, but it ended up limiting investors who wanted to transfer cash to their home countries, while hampering a company’s ability to pay for imports.

Government Mismanagement

Cash reserve shortages constitute another part of the problem, which partly stems from former President Mohamed Morsi, ousted at the hands of then-General el-Sisi, and his refusal to compromise with the opposition. Morsi’s governance not only scared away investors, but also contributed to a rise in unemployment and inflation, forcing the government to take more loans to finance food and energy subsidies.

Egypt depended on other nations for financing, with Saudi Arabia and Qatar representing the largest lenders to the nation, including the Egyptian public through bond purchases. However, it did not prevent officials from burning through reserves to sustain the economy.

Tourism Comeback

Tourism constitutes another vital aspect of the Egyptian economy, but the sector has suffered from political instability. With that, the sector may be revitalized thanks to archaeologists who believe they found the lost tomb of Queen Nefertiti. The queen became a noteworthy ruler with her husband, Akhenaten, during Egypt’s ancient past, but her death and burial remains a mystery.

Although authorities have not substantiated the claims, experts claim 90-percent certainty that they found the long-lost Queen, notes the New York Times. The government aims to use the discovery to restore its fledgling tourism sector, with overall tourist numbers plummeting due to violence and power struggles.

The country went from 12,000 visitors a day in 2011 to just 300 a day in 2012. Many tourists stayed away from the country’s cities but continued to visit the nation’s notable beaches until militants struck down a Russian plane carrying tourists.