EGYPT group 9

Egypt GNP

Egypt GNP for 2021 was $365.80B, a 18.98% increase from 2020. Egypt gnp for 2020 was
$307.45B, a 13.93% increase from 2019. Egypt gnp for 2019 was $269.86B, a 1.85% decline
from 2018.

(Gross national product (GNP), total market value of the final goods and services
produced by a nation’s economy during a specific period of time (usually a year), computed before
allowance is made for the depreciation or consumption of capital used in the process of production.)

GDP

404.14 billion US dollars were the value of Egypt's Gross Domestic Product (GDP) in 2021,
according to official World Bank figures. Egypt's GDP accounts for 0.02 percent of the global
economy.

(One of the Middle East's most advanced and diverse economies is Egypt's. Prior to 2010, Egypt's
economy grew by an average of 5% every quarter as a result of various changes that attracted foreign
investment. The bulk of the population's living conditions and the economy both improved during that
time. However, the standard of life in Egypt remained low, and wide income gaps kept expanding, fueling
the unrest among the populace. Since President Hosni Mubarak's dictatorship was overthrown in a
revolution in 2011, industry, construction, and tourism have all suffered. Political and institutional
uncertainty and increased insecurity are to blame.)

INFLATION RATE

Inflation comes in at highest level in four years in October

((Inflation Rate in Egypt is expected) according to Trading Economics global macro

models and analysts expectations.

Inflation increased to 16.2% in October from 15.1% in September, increasing higher above the
Central Bank's goal range of 5.0-9.0%, where it has stayed for the previous eight months. The
rate in October was the highest since that month of 2018. According to the release's specifics, the
acceleration was mostly caused by rapidly rising food and non-alcoholic beverage prices, which
increased by almost 24%. However, despite a slight slowdown in growth, transportation costs
grew by more than 17%.)
FOREX RATE

The exchange rate in Egypt has experienced severe changes during the last ten years.

(Egypt, a developing country, has seen changes in the currency rate over the past ten
years. A dramatic change occurred between October 2016 and January 2017, when the Egyptian pound
devalued by nearly 111% over a short period of time, from 8.8799 to 18.7. Earlier in the decade, between
January 2011 and January 2016, the Egyptian pound showed a slight depreciation, falling from 5.8590 to
7.83 against the dollar. In addition, the Egyptian pound fell to a record low against the dollar in January
of that year of 19.56 before briefly rising to 15.79 in February. The Egyptian pound gradually increased
in value in 2021, going from 17.63 to 15.7008.)

UNEMPLOYMENT RATE

In comparison to the prior year, Egypt's unemployment rate rose by 0.2 percentage points in
2021. In 2021, the overall unemployment rate was 9.33 percent. The unemployment rate has
evolved over the period of the monitoring.

(Both lower family wealth and fathers with less education are key indicators of youth
employment risk. Even decades later—20 years in the instance of Egypt—these relationships between
family conditions and occupational results are still there. Because just 10% of Egypt's land is used for
habitation, agriculture, and manufacturing, excessive population growth there is a terrible problem that
contributes to unemployment.)

PILLARS OF THE ECONOMY

1. Agriculture

The Nile Valley and Delta are the country’s two most agriculturally productive lands, which
covers an estimated 6 million acres when combined. Grains (rice, wheat, and corn), cotton,
sugarcane, tobacco, and onions are the most important crops in Egypt. Most of Egypt sits on a
desert, which expands each year, threatening the country’s 3.1 million-hectare arable land. An
estimated 11,736 hectares of this agricultural land is lost to desertification each year. As water is
a scarce resource in the country, Egypt has invested heavily in solar-powered desalination
facilities. The country relies on food imports to sustain its domestic demand. The domestic
production of wheat in the country was about 8.3 million tons in 2015, against a demand of 19.6
million tons. In the same period, the country produced 6.1 million tons of corn, against a demand
of 10.9 million tons. Most of the imported grain is sourced from the United States.

2. Oil
Oil dominates Egypt’s energy industry, with the country producing as much as 0.9 million
barrels of oil each day. The proven oil reserves on which Egypt sits on are among the largest
globally, estimated to be 3.7 billion barrels. Egypt is a significant player in global oil production
and is a member of the OAPEC (an acronym for Organization of Arab Petroleum Exporting
Countries). The Gulf of Suez, the Western and Eastern Deserts, and the Sinai Peninsula are
Egypt’s top oil-producing regions. The biggest of all refineries in the country is the El-Nasr
Refinery situated in Suez, which has a capacity of refining about 0.146 million barrels of oil each
day. Cumulatively, all nine refineries in the country have a daily capacity of processing over
0.726 million barrels. The country consumes most of its oil; as much as 0.564 million barrels
each day, the majority of which is used in power production.

3. Natural Gas

Egypt is also a major producer of natural gas, having Africa’s third largest confirmed gas
reserves. The country is believed to sit on 120 trillion cubic feet of natural gas reserves. The
Zohr region sits on the largest gas field deposits in the Mediterranean region, estimated to have
30 trillion cubic feet in volume. Egypt’s Eastern and Western Deserts are believed to
cumulatively have 5.7 million barrels in shale oil reserves, among the highest in the region. Most
of the natural gas produced in Egypt is consumed locally. In 2013, 1.9 trillion cubic feet of the
total 2 trillion cubic feet of natural gas produced in the country went to the domestic market. The
Middle East is an important market for Egypt’s natural gas, most of which is transported through
the 750-mile long Arab Gas Pipeline.

4. Hydroelectricity

Hydropower is the number-one source of Egypt’s electricity, as the country taps into the power
of the Nile. There are numerous hydropower stations found along the Nile, with the Aswan High
Dam, the Naga Hamady and the Esna Dam being the three major stations. Aswan High Dam is
the most important of the three and has an electricity production capacity of 2,100 MW. The
country is also about to venture into nuclear energy, after years of deliberations and plans are
underway to establish a $1.5-billion nuclear power plant at El Dabasa.

5. Solar and Wind Power

Another sector in the industry is solar energy. With most of the country being a desert, and
having some of the highest annual solar hours in the world, it is expected that Egypt is a major
player in solar energy production. But despite increased investments from the Egyptian
government in renewable energy source, solar energy accounts for only 1% of the country’s
electricity. Nonetheless, Egypt is home to impressive solar installation projects, including the
world’s largest solar installation; the Benban Solar Park. Wind energy is another area in which
Egypt has great potential, particularly along the coast of the Red Sea. The country has put in
place infrastructure to tap into this energy resource, which is expected to account for about 12%
of the country’s electricity production.
 6. Tourism Industry

Another key contributor to Egypt’s economy is the country’s tourism industry. The industry
employs about 12% of Egypt’s labor force and accounts for 11% of Egypt’s Gross Domestic
Product. The Great Pyramids of Giza, are the country’s star attraction. Egypt’s popularity as a
top tourist destination rose tremendously in the 20th century, with tourist numbers growing from
100,000 in 1951, to 5.5 million in 2000. Tourist numbers in Egypt reached their highest in 2010
when approximately 14.7 million visitors toured the country bringing in $12.5 billion in revenue.
However, the industry is yet to reach such heights in revenue and tourist numbers, after the 2011
Arab Spring and the civil unrest that ensued ruined the nation’s reputation internationally. To
illustrate the effects of the Arab Spring on the industry tourist numbers dropped to 9 million in
2011, from the 14 million recorded in 2010, a 37% plunge, while revenue dropped from $12.5
billion to $8.7 billion in the same period. The decline in tourist numbers witnessed in the recent
past has had a domino effect in other sectors of the industry such as hospitality, tours, and travel

7. MEDIA

Media-wise, Egypt dominates the region. A large portion of the Arab-speaking world receives
programming from its Media Production City, which is home to one of the region's most
influential and widely read media outlets and a thriving film and television industry. The state
controls numerous TV and radio stations, websites, newspapers, and magazines, making it a
powerful player in the media. It's rumored that the intelligence agency owns the largest media
company.

8. Automative

In both the Middle East and North Africa (MENA) region and on a worldwide scale, Egypt
frequently tops lists of auto assembly producers and auto supplier firms. As part of its efforts to
achieve the 2030 Sustainable Development Goals, spread dependence on electric cars, and
develop new cities, Egypt is currently expanding its automotive sector as part of a new
development movement aimed at increasing domestic production capacity as well as working to
begin the production of electric cars

ONE KNOWN COMPANY

commercial international bank (cib)

Commercial International Bank is the leading private sector bank in Egypt, offering a broad
range of financial products and service to its customers. CIB was the first and only bank in Egypt
to start enforcing Business continuity standards since 2010. CIB is certified in Business
continuity management covering all banks services and related operations. CIB has fully fledged
business continuity plans, which were developed to mitigate risks and reduce potential negative
issues and impacts of natural and man-made disasters.
The Commercial International Bank is one of top 100 Companies in the Middle East 2021,
providing them with the best financial solutions. The bank has maintained its existence as the
most profitable commercial bank in Egypt for more than 35 years, thanks to its management that
adopts the highest standards of transparency and governance in addition to the distinguished
training programs provided to its employees, and the number of its employees is about 6000.

WAR AGAINST COVID

1, Partial lockdowns and restrictions

Like most emerging markets, the COVID-19 pandemic has been an enormous shock for
the Egyptian economy. The fallout was immediately felt through a sudden stop in
tourism—which, at the onset of the crisis, accounted for around 12 percent of GDP, 10
percent of employment, and 4 percent of GDP in foreign currency earnings.
Precautionary measures to contain the spread of the virus, including partial lockdowns
and restrictions on capacity in public spaces, resulted in a temporary decline in
domestic activity, while the government’s budget was stretched as the economic
slowdown reduced tax revenues. Egypt also experienced significant capital outflows of
more than $15 billion during March-April 2020 as investors pulled out of emerging
markets in a flight to safety. Nonetheless, Egypt was one of the few emerging market
countries that experienced a positive growth rate in 2020, thanks to the government’s
timely response, the short period of lockdown and Egypt’s relatively diversified
economy.

2. Massive Disinfection program

Campaigns of “Stay home, stay safe” for adopting social distancing on the social
networks were performed extensively to create COVID-19 pandemic awareness among
the public. Campaigns were launched in media and on the roads to promote frequent
handwashing, cough etiquette, the use of personal protection equipment (e.g.,
facemasks), reducing hand-to-face contact, avoiding sharing bedrooms and towels,
diminishing air conditioner (AC) use, and avoiding crowding in public transport. Also,
the public was motivated to report fever and other symptoms, risk factors for
coronavirus infection, including travel history to the affected areas, and close contacts
with confirmed or suspected cases. 

The Egyptian Ministry of Health and Population (MOH) has launched a specialized
hotline to provide medical counseling services for people in need. All festivals were
suspended, and the number of employees was reduced in non-vital works to encourage
public sector employees to work remotely, minimizing their contact and contamination
of workplaces with the virus. The Egyptian government has carried out a massive
disinfection program prioritizing all squares, workplaces, touristic locations, touristic
hotels (permanent and floating), and restaurants, using chlorine-containing
disinfectants as lipid solvents. 

3. Extended fund facility (2016 - 2019)

Egypt entered the COVID-19 crisis with sizable buffers, thanks to reforms implemented
since 2016 to restore macroeconomic imbalances, including under the 2016-19
Extended Fund Facility (EFF). Those included floating the exchange rate to eliminate
currency overvaluation, fiscal consolidation to reduce public debt, energy subsidy
reform to address a key fiscal risk and create space for social spending, and structural
reforms to strengthen the business climate, attract investment, and increase
employment opportunities, in particular among youth and women. As a result, the
government was able to quickly respond with a comprehensive support package while
preserving economic stability. For example, fiscal support included relief to businesses
and workers in the hardest-hit sectors such as tourism and manufacturing, the
postponement of tax payments and the expansion of cash transfer programs to poor
households and irregular workers.

4. Central Bank of Egypt reduced policy interest rates

 The Central Bank of Egypt reduced policy interest rates by 400 basis points during
2020—with the overnight deposit rate cut from 12.25 percent to 8.25 percent—to help
support economic activity and alleviate pressures in domestic financial markets. It also
introduced several initiatives to reduce pressure on borrowers and ensure liquidity for
the most impacted sectors, including increased access to credit at preferential interest
rates and a six-month debt moratorium on existing credit. These exceptional financial
sector measures were important to ensure smooth credit flow in the economy in the
wake of the COVID-19 crisis.

5. IMF's role

The IMF provided about $8 billion in financial support through a two-pronged plan to
help Egypt address the financing needs that resulted from the pandemic. The Rapid
Financing Instrument provided $2.8 billion in emergency financial assistance in May
2020 to ensure that the government had enough foreign currency to fund essential
imports and other needs. The Stand-by Arrangement (SBA), approved in June 2020,
provided the government access to a total of about US$5.4 billion over the subsequent
12 months.  

Nonetheless, Egypt was one of the few emerging market countries that experienced a positive
growth rate in 2020, thanks to the government’s timely response, the short period of lockdown
and Egypt’s relatively diversified economy.

POVERTY LINE

National poverty lines are calculated based on consumption patterns of households in the country
and are therefore adjustable over the years. Egypt’s national poverty line stood at 10,300
Egyptian pounds (comparable to 561.91 U.S. dollars) annually as of 2019/2020. This was an
increase from 3,100 Egyptian pounds (169.12 U.S. dollars) ten years prior. In November 2016,
the Central Bank of Egypt (CBE) declared that it fully floated the Egyptian pound, causing the
currency devaluation.

INEQUALITY RATE

Egypt ranks as one of the world’s most equal countries judging by official estimates of income
and consumption inequality.In Egypt, there is a sense that economic success is reserved for the
privileged, and that opportunities for the majority are largely missing. For example, Assaad
(2013) estimates that a child from a disadvantaged family has a one-in-ten chance of enrolling
into university, while a child from a privileged family is virtually guaranteed to make it to
university. Efforts to redistribute income from the rich to the poor are also limited. Taxes have
become more regressive, particularly since 2005, as has been documented in a recent op-ed by
Diab (2016). There have been some efforts to restore a degree of progressivity, but these have
encountered resistance. During this period, signs of inequality have become increasingly more
visible. Diab (2016) writes, “In Egypt, where luxury hotels and upscale neighborhoods abut
sprawling informal settlements, inequality is out in the open, bringing with it the constant
potential for social unrest.”

Dealing Oil Price Egypt

The Russian military operation in Ukraine destabilized global oil markets, taking prices to record
high. The increasing oil prices are going to affect the Egyptian economy in several ways, either
positively or negatively.

The rise in oil price has also led to an increase in fuel prices, hence it hit all local sectors and
boosted the prices of all commodities. The inflation rate in Egypt increased to reach 8.8% in
February, according to the Central Bank of Egypt.

To reduce the negative effects on the Egyptian economy and the current budget, the CBE
decided to raise interest rates by 1% to contain inflation and reach the target rate of 7% ( 2
percentage points) on average in 4Q 2022. This led to the depreciation of the EGP against the
dollar by about 16%.