GEC 103 B4-1 (The Contemporary World)

Continent: AFRICA
Country: EGYPT

Egypt: Introduction

Egypt is a country in North Africa that borders the Red Sea and the Mediterranean Sea.
Neighboring countries include Libya, the Gaza Strip, and Sudan. Egypt includes parts of the Sahara
Desert, Libyan Desert, and the Nile River, which runs from south to north. The government system is a
republic; the chief of state is the president, and the head of government is the prime minister. Egypt has
a mixed economic system which includes a variety of private freedom, combined with centralized
economic planning and government regulation. Egypt is a member of the League of Arab States (Arab
League) and the Common Market for Eastern and Southern Africa (COMESA).

A. Gross Domestic Product (GDP)

The Gross Domestic Product (GDP) in Egypt was worth 476.75 billion US dollars in 2022,
according to official data from the World Bank. The GDP value of Egypt represents 0.20 percent of the
world economy.

The gross domestic product (GDP) measures of national income and output for a given country's
economy. The gross domestic product (GDP) is equal to the total expenditures for all final goods and
services produced within the country in a stipulated period of time.

Egypt GDP

Actual Previous Highest Lowest Dates Unit Frequency

476.75 424.67 476.75 4.00 1960-2022 USD Yearly Current USD
Billion

Source: https://tradingeconomics.com/egypt/gdp

B. GDP Growth Rate

Egypt has revised its growth forecast for FY 2023/2024, now expecting a rate of 3.5%, down from
November's estimate of 4.2%, according to the Minister of Planning and Economic Development. The
revision was attributed to a series of external shocks and disturbances, including geopolitical tensions
and global crises, such as the impact of the Israeli war on Gaza.
Egypt Full Year GDP Growth Rate

Actual Previous Highest Lowest Dates Unit Frequency

3.50 6.17 7.18 1.94 2004 - percent Yearly Constant
2023 Prices
2016-17

Source:https://tradingeconomics.com/egypt/full-year-gdp-growth

C. Consumer Spending

⮚ The clothing and footwear consumer spending per capita in Egypt are forecast to
amount to €122.00 in 2024.
⮚ The consumer spending per capita on the household in Egypt is forecast to amount
€82.08 in 2024.
⮚ The consumer spending per capita on miscellaneous goods in Egypt is forecast to
amount €73.83 in 2024.

Source:https://fr.statista.com/outlook/co/consumption-indicators/consumer-goods/egypt

Final Consumption Expenditure (% of GDP) - Egypt, Arab Rep

Source:https://data.worldbank.org/indicator/NE.CON.TOTL.ZS?end=2022&locations=EG&start=1960&view=chart
D. Exchange Rate

The Egyptian pound has been struggling against the US dollar for months, leading prices of
essential commodities to hike. Egypt has hiked wages to tackle crisis. Egypt's currency the Egyptian
Pound (EGP) has been declining in value against major foreign currencies led by the US dollar (USD) since
2022, in the wake of post-Covid 19 reopening of major economies and the Ukraine war that triggered an
inflationary wave pushing interest rates up and reshoring foreign investments back into the developed
economies.
In the meantime, Egypt's allies in the oil-rich Gulf have stopped unconditionally bailing out Cairo.
Egypt has encountered an enormous financing gap surpassing US$8 billion for the fiscal year 2023/2024,
which could amount to over US$20 billion in four years. The country's external debt soared by 5.1 per
cent during the fourth quarter of 2022, reaching US$162.94 billion, a total of US$10 billion more than
the previous quarter.

Source:https://www.newarab.com/news/how-much-usd-egyptian-pound-egp-black-market?fbcli
d=IwAR38go3H1khefqiGBTghQ4kOtWu2VuYHFdV1u-xWZ1f-T382Fwq5G63kVxA

E. GDP per Capita

The Gross Domestic Product per capita in Egypt was last recorded at 4088.90 US dollars in 2022.
The GDP per Capita in Egypt is equivalent to 32 percent of the world's average. GDP per Capita in Egypt
averaged 2098.56 USD from 1960 until 2022, reaching an all time high of 4088.90 USD in 2022 and a
record low of 750.81 USD in 1960.

Egypt GDP per capita

Actual Previous Highest Lowest Dates Unit Frequency

4088.90 3896.84 4088.90 750.81 1960 - USD Yearly Constant
2022 2015 USD

Source:https://tradingeconomics.com/egypt/gdp-per-capita

F. GNP

GNI (formerly GNP) is the sum of value added by all resident producers plus any product taxes
(less subsidies) not included in the valuation of output plus net receipts of primary income
(compensation of employees and property income) from abroad. Data are in current U.S. dollars. GNI,
calculated in national currency, is usually converted to U.S. dollars at official exchange rates for
comparisons across economies, although an alternative rate is used when the official exchange rate is
judged to diverge by an exceptionally large margin from the rate actually applied in international
transactions. To smooth fluctuations in prices and exchange rates, a special Atlas method of conversion is
used by the World Bank. This applies a conversion factor that averages the exchange rate for a given year
and the two preceding years, adjusted for differences in rates of inflation between the country, and
through 2000, the G-5 countries (France, Germany, Japan, the United Kingdom, and the United States).
From 2001, these countries include the Euro area, Japan, the United Kingdom, and the United States.

⮚ Egypt gnp for was $0.00B, a 100% decline from 2022.

⮚ Egypt gnp for 2022 was $455.14B, a 18.23% increase from 2021.

⮚ Egypt gnp for 2021 was $384.94B, a 18.93% increase from 2020.

⮚ Egypt gnp for 2020 was $323.68B, a 13.78% increase from 2019.

Source:https://www.macrotrends.net/countries/EGY/egypt/gnp-gross-national-product

G. Stock Market

The main stock market index in Egypt (EGX 30) increased 3579 points or 14.41% since the
beginning of 2024, according to trading on a contract for difference (CFD). The Egyptian Exchange is one
of the oldest stock markets established in the Middle East. The Egyptian Exchange traces its origins to
1883 when the Alexandria Stock Exchange was established, followed by the Cairo Stock Exchange in
1903. The Egyptian stock market includes individual investors, institutional investors, and foreign
investors. EGX has 242 listed companies, these companies issue shares that can be bought and sold on
the exchange. EGX has a 35,111 million US Dollar domestic market capitalization.

Source:https://www.egx.com.eg/en/History.aspx?fbclid=IwAR0XkePRXWi229yBiRFy9pFO7ae2C1-
s6CZ2SU9qbC3w94AN4jCWYsIJkK8

H. Interest Rate

Egypt ranks among the countries with the highest interest rates in 2024. Egypt has an interest
rate of 19.25% in January of 2023 and 21.25 percent as of February 2024. In a December 2023 meeting,
the Central Bank of Egypt kept its key overnight deposit rate and lending rate at 19.25% and 20.25%,
respectively. The benchmark interest rate in Egypt was last recorded at 21.25 percent. Interest Rate in
Egypt averaged 11.96 percent from 1991 until 2024, reaching an all time high of 21.40 percent in
October of 1991 and a record low of 8.25 percent in September of 2009.

Source:https://www.reuters.com/markets/rates-bonds/egypts-central-bank-keeps-interest-rates-
unchanged-statement-2023-12-21/?fbclid=IwAR2wBdeks6AptAvciOeCgLQuphfRg8XE138JT_Ew99YxefAJNC
o3jsrQDWU

I. Government Debt

Public debt in Egypt averaged 86.7% of GDP in the decade to 2022, significantly above the
Middle East and North Africa region's average of 40.7% of GDP. (2024, February 1) reached 164.5 USD bn
in September 2023, compared with 164.7 USD bn in the previous quarter. Egypt's gross domestic debt
data was reported at 4,742,107.000 EGP in June 2020. This records an increase from the previous
number of 4,501,983.000 EGP mn for March 2020. Egypt Gross Domestic Debt data is updated quarterly,
averaging 722,630.500 EGP mn from September 1997 to June 2020, with 92 observations. CEICdata.com.
(2023, August 19). According to an article published by Aaron O'Neill, the national debt in Egypt was
forecast to continuously increase between 2023 and 2028 by a total of 407.7 billion U.S. dollars (+132.31
percent). After the tenth consecutive increasing year, the national debt is estimated to reach 715.89
billion U.S. dollars and therefore reach a new peak in 2028. Notably, the national debt has been
continuously increasing over the past few years. The indicator describes the general government gross
debt, which consists of all liabilities that require payment or payments of interest and/or principal by the
debtor to the creditor at a date or dates in the future.
 Source:https://www.ceicdata.com/en/egypt/domestic-debt/gross-domestic-debt?fbclid=IwAR0Y
qPK5FN-uqOOdORM2FSrrt27OFoCGU_zlIfnU0h_aRk441bsrAd_kefA#:~:text=Egypt%20Gross%20Domestic
%20Debt%20data,Jun%202020%2C%20with%2092%20observations

J. Rate of Inflation

The annual urban inflation rate in Egypt eased for the fourth consecutive month to a one-year
low of 29.8% in January 2024 from 33.7% in December, falling below market expectations of 32.5%.
However, it remains well above the upper limit of the central bank's target range of 5-9%. Monthly,
consumer prices inched up by 1.6% in January, the most in five months, after a 1.4% rise in the prior
month. The government in January increased the price of Cairo metro tickets by up to 20%, internet
services by as much as 33% and electricity prices by as much as 26%. Meanwhile, Egyptian President
Abdel Fattah al-Sisi ordered all government monthly salaries to be raised by a minimum of 1,000 to 1,200
Egyptian pounds to address the cost of living crisis.

Egypt Inflation Rate

Actual Previous Highest Lowest Dates Unit Frequency

29.80 33.70 38.00 -4.20 1958-2024 Percent Monthly 2018/2019=100

Source: https://tradingeconomics.com/egypt/inflation-cpi

K. Unemployment

Unemployment Rate in Egypt increased to 7.10 percent in the third quarter of 2023 from 7
percent in the second quarter of 2023. Unemployment Rate in Egypt averaged 10.19 percent from 1993
until 2023, reaching an all time high of 13.40 percent in the third quarter of 2013 and a record low of
7.00
percent
in the
second
quarter
of 2023
Egypt Unemployment Rate

In Egypt, the unemployment rate measures the number of people actively looking for a job as a
percentage of the labour force.

Actual Previous Highest Lowest Dates Unit Frequency

7.10 7.00 13.40 7.00 1993-2023 Percent Quarterly

Unemployed Persons

The number of unemployed persons in Egypt decreased to 2185 Thousand in the fourth quarter
of 2022 from 2250 Thousand in the third quarter of 2022. Unemployed Persons in Egypt averaged
2719.58 Thousand from 2003 until 2022, reaching an all time high of 3695.00 Thousand in the first
quarter of 2014 and a record low of 2022.00 Thousand in the first quarter of 2003.

In Egypt, unemployed persons are individuals who are without a job and actively seeking to work

Actual Previous Highest Lowest Dates Unit Frequency

7.10 7.00 13.40 7.00 1993-2023 Percent Quarterly

L. Balance of Trade (Trade Deficit and Trade Surplus)

Egypt recorded a trade deficit of 3068 USD Million in November of 2023. Balance of Trade in
Egypt averaged -998.59 USD Million from 1957 until 2023, reaching an all time high of 235.50 USD
Million in January of 2004 and a record low of -5056.10 USD Million in August of 2014.
Egypt Balance of Trade

Egypt has been recording trade deficits since 2004, as imports have grown at a faster rate than
exports, mostly due to a rise in petroleum and wheat imports. The major exports are oil and other
mineral products, chemicals, agricultural products, livestock and textiles. Egypt imports mineral and
chemical products, agricultural products, livestock and foodstuff, machinery and electrical equipment
and base metals.

Actual Previous Highest Lowest Dates Unit Frequency

-3068.00 -3146.00 235.50 -5056.10 1957 - 2023 USD Million Monthly

Forecast

According to forecasts by Trading Economics utilizing global macro models and analyst
predictions, Egypt's balance of trade is anticipated to reach approximately -2650.00 USD Million by the
conclusion of the current quarter. Looking ahead, econometric models suggest a long-term trend
projecting the country's balance of trade to stabilize at around -2200.00 USD Million by 2025.

source: https://tradingeconomics.com/egypt/balance-of-trade

Synthesis

Egypt, a pivotal nation in North Africa, boasts a diverse landscape, stretching from the Sahara
and Libyan Deserts to the fertile lands surrounding the Nile River. Economically, Egypt maintains a mixed
system, blending private enterprise with centralized planning. Despite challenges such as geopolitical
tensions and global crises impacting its GDP growth rate, Egypt's GDP in 2022 stood at approximately
$476.75 billion, representing a notable share of the global economy. However, the country faces
currency devaluation against major currencies like the US dollar, leading to inflationary pressures and
challenges in financing its deficits. Moreover, high interest rates, rising public debt, and persistent
unemployment rates of around 7% pose additional economic hurdles. Nevertheless, Egypt's stock
market has shown resilience, with the EGX 30 index increasing by 14.41% in 2024, showcasing investor
confidence. Efforts to address economic imbalances include wage hikes and adjustments in government
spending, particularly in response to the cost of living crisis reflected in the inflation rate. Despite a trade
deficit stemming from higher imports, especially in petroleum and wheat, forecasts indicate potential
stabilization in the balance of trade by 2025. Overall, Egypt grapples with multifaceted economic
challenges but exhibits resilience and potential for growth amid global uncertainties.