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Country Forecast Egypt

  • ID: 2138629
  • Country Profile
  • September 2021
  • Region: Egypt
  • 51 Pages
  • The Economist Intelligence Unit
Background: In 1952 an army coup brought an end to the monarchy in Egypt. Two years later, Gamal Abdel Nasser, a former military officer, led the country (1954-70) and introduced nationalist policies. Under his successor as president, Anwar Sadat (1970-81), Egypt's political stance shifted towards the West and its economic policies became more liberal. Mr Sadat's signing in 1979 of a peace treaty with Israel eventually led to his assassination and the appointment of his deputy, Hosni Mubarak, as president in 1981. However, Mr Mubarak grew increasingly unpopular among Egyptians as official corruption became rampant during his three-decade tenure, and a popular uprising, backed by the military, forced his resignation in early 2011. The Muslim Brotherhood, which had been banned since 1954, won the parliamentary and presidential elections in 2012; however, in the wake of mass protests, it was ousted by the military in July 2013. The former army chief, Abdel Fattah el-Sisi, was elected president in a landslide victory in 2014 and was re-elected in 2018.

Political structure: Egypt's semi-presidential system is based on the 2014 constitution, which granted parliament wider powers, including the right to withdraw confidence from the president. However, the current parliament-elected in late 2015-lacks an effective opposition bloc. In April 2019 the constitution was amended to extend the presidential term and strengthen the powers of the office-including over parliament, the judiciary and the military. Cabinet ministers are often subjected to scrutiny, which can result in their dismissal and, in some cases, court action.

Policy issues: Weak institutional capacity and opposition from vested interests often block economic reform. Nonetheless, the Sisi regime is keen to enhance the business environment and consolidate the public finances through fiscal reform, although reform capacity will be diminished by the need to deal with waves of Covid-19 and by related spending.
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Country Forecast Egypt

Egypt--highlights: Political outlook

Egypt--highlights: Business environment outlook

Egypt--highlights: Economic outlook

Egypt--highlights: Demographic outlook

Egypt--highlights: Market opportunities

Egypt--highlights: Long-term outlook

Fact sheet

Political outlook: Political forces at a glance
The technocratic government is subservient to the president

Political outlook: Political stability

Political outlook: Political and institutional effectiveness

Political outlook: Election watch

Political outlook: International relations

Business environment outlook: Business environment rankings
Policy reforms will continue in a bid to cement earlier gains despite pandemic

Business environment outlook: Egypt's business environment at a glance
Policy towards private enterprise and competition
Policy towards foreign investment
Foreign trade and exchange controls
Taxes
Financing
The labour market
Infrastructure
Technological readiness

Business environment outlook: Macroeconomic environment
Reforms of 2016-19 have helped build some resilience during the crisis
High repayment obligations pose long-term threat to external finances

Business environment outlook: Policy towards private enterprise and competition
Legislation to encourage investment in both new and existing projects

Business environment outlook: Policy towards foreign investment
Despite intermittent market pressure, reforms will not be reversed
Transparency on FDI flows is improving

Business environment outlook: Foreign trade and exchange controls
Foreign trade and exchange controls will not be reimposed

Business environment outlook: Taxes
Tax policy will keep most gains, but an element of unpredictability remains
The government has adjusted personal income tax thresholds

Business environment outlook: Financing
Confidence in the financial system has strenghtened despite pandemic blip
Looser monetary policy should allow greater private-sector borrowing
Central bank provides guarantees to ease credit difficulties
Minimum capital requirements are rising for banks

Business environment outlook: The labour market
Unemployment is rising because of the economic fallout from the pandemic
Focus on private-sector employment

Business environment outlook: Infrastructure
Government will seek to sustain growth with continued infrastructure spending
The government is investing heavily in energy and transport infrastructure

Business environment outlook: Technological readiness
Egypt is playing catch-up with technological developments
The ICT sector is gaining increasing attention from the government

Economic forecast: Policy trends

Economic forecast: Fiscal policy

Economic forecast: Monetary policy

Economic forecast: International assumptions

Economic forecast: Economic growth

Economic forecast: Sectoral trends

Economic forecast: Inflation

Economic forecast: Exchange rates

Economic forecast: External sector

Economic forecast: Foreign direct investment in Egypt
Stocks and flows
Origin and distribution
Determinants
Impact

Demographic assumptions
Egypt's population will reach 110m by the end of the forecast period
Outward migration to the Gulf states, Europe and North America will fall
Poverty rate continues to rise

Market opportunities: Market outlook
The pandemic slowed the recovery in incomes but did not halt it
Wide income disparities remain
Retail markets are still underdeveloped

Market opportunities: Consumer expenditure

Market opportunities: Social indicators and living standards

Long-term outlook: The long-term outlook

Long-term outlook: Long-term trends
Climate change and sustainability
Technological developments

Long-term outlook: Methodology for long-term forecasts
Growth projections
Definitions of variables
The independent variables include:
Summary of findings
Productivity growth

Data summary: Global outlook

Data summary: Gross domestic product, current market prices

Data summary: Gross domestic product, at constant prices

Data summary: Gross domestic product by sector of origin

Data summary: Growth and productivity

Data summary: Economic structure, income and market size

Data summary: Fiscal indicators

Data summary: Monetary indicators

Data summary: Employment, wages and prices

Data summary: Current account and terms of trade

Data summary: Foreign direct investment

Data summary: External debt

Data sources and definitions
Global data
Domestic data
Abbreviations

Guide to the business rankings model
Outline of the model
Calculating the rankings
Measurement and grading issues

Indicator scores in the business rankings model
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