Economy of Egypt
Economy of Egypt Last updated on Friday 16th April 2010
Oil represents about 50 percent of Egypt’s export earnings. Until the mid1990's Egypt used to produce more than 900,000 barrels per day. Cotton is the second most important export; cotton processing and textile production are the principal manufacturing activities. Cement, iron, fertilizers, steel, rubber products, chemicals, sugar, tobacco, canned foods, small metal products, cottonseed oil, shoes and furniture are other important export products. Egypt’s ancient monuments and pleasant climate attract tourists from many nations. Cairo alone has about 13,000 hotel rooms- approximately 20 percent of Egypt’s total. Other main economic revenues include expatriates money transfers and Suez Canal revenues. Despite many successes, Egypt continues to need foreign aid. Egypt’s Social Fund for Development borrowed money from the International Development Agency to create about 70,000 jobs annually between 1997 and the year 2000.
A series of IMF arrangements - coupled with massive external debt relief resulting from Egypt's participation in the Gulf war coalition - helped Egypt improve its macroeconomic performance during the 1990s. Through sound fiscal and monetary policies, Cairo tamed inflation, slashed budget deficits, and built up foreign reserves. Although the pace of structural reforms - such as privatization and new business legislation - has been slower than the IMF envisioned, Egypt's steps toward a more market-oriented economy have prompted increased foreign investment. Lower combined hard currency inflows - from tourism, worker remittances, oil revenues, and Suez Canal tolls - in 1998 and the first half of 1999 resulted in pressure on the Egyptian pound and sporadic dollar shortages, but external payments were not in crisis. Despite ample reserves, the Central Bank did not provide sufficient hard currency to commercial banks and Cairo restricted imports for a short period; these developments confirmed to some investors and currency traders that government financial operations lack sufficient coordination and openness. Monetary pressures have since eased, however, with the continued oil price recovery starting in mid-1999 and a moderate rebound in tourism. Increased gas exports are a major plus factor in future growth.
GDP: purchasing power parity - $200 billion (1999 est.)
GDP - real growth rate: 5% (1999 est.)
GDP - per capita: purchasing power parity - $3,000 (1999 est.)
GDP - composition by sector:
- agriculture: 17%
- industry: 32%
- services: 51% (1999)