The day after Hosni Mubarak stepped down as Egypt's president, completing the first step of the revolution, Cairo is trying to get back to normal in the economic sphere. Over the weekend, analysts from around the world published a slew of initial reports about the change in Egypt and expectations about the country's economic capability.
The analysts say that each day of the 18-day uprising cost Egypt's economy $1 billion in capital outflow, as foreign investors took money out. The uprising also affected the country's infrastructures, key institutions, and its tourism industry, which accounts for 11% of GDP and 10% of jobs. Banks estimate the total loss to the Egyptian economy at over $30 billion.
The biggest damage will likely be to Egypt's GDP growth rate. Before the demonstrations, a "Reuters" survey of analysts predicted 5.4% GDP growth in 2011, the fastest for an Arab country after Qatar. Egypt's government predicted 6% growth. Most analysts now predict 1-2% growth this year.
Before the uprising, Egypt's GDP was $217 billion, half the GDP of Saudi Arabia. Egypt's GDP relied on foreign investment, tourism, and transit fees through the Suez Canal.
RBS emerging market research analyst Tim Ash said, "In terms of the economy, Egypt has been run by the same technocrats for the last 30 years. I don’t think you're going to see too much of a change. The establishment is still around. Their real agenda is no change until September."
Published by Globes [online], Israel business news - www.globes-online.com - on February 13, 2011
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