Egypt’s Economy: Looking Shaky Despite Cash Inflows

Three pillars of Egypt’s economy have suffered over the last three years: tourism receipts, Suez Canal revenues, and foreign direct investment.

Terrorist attacks meant tourism takings nosedived to just $1.1bn in the first half of last year, down from $3.4bn in H1 2015 and $12.5bn in 2010 as a whole. Suez Canal revenues fell last year from $5.18bn in 2015 to $5.01bn, despite a costly $8bn expansion in August 2015.

Falling revenues meant the budget deficit soared to 12.3% of GDP for 2016.

The oil and gas sector is a prime source of foreign direct investment but many IOCs have baulked at the prospect of pumping cash into a country with little prospect of a return. Firms have repeatedly complained about the growing amount of money they are owed in receivables. Cairo’s official number at the end of 2016 stood at $3.5bn, almost halving the end-2013 figure but up $500mn on end-2015. MEES puts the figure at $5bn at end-September (see chart) based on company filings. (CONTINUED - 443 WORDS)

DATA INSIDE THIS ARTICLE

chart Egpc’s Dues To Foreign Oil Operators ($Bn, End Period)
chart Egypt’s Foreign Reserves Up Further $2bn In Jan, To Highest Level Since 2011 ($Bn, End Period)