President El-Sisi’s supporters are celebrating the general’s sweeping victory in Egypt’s flawed presidential poll.
But it’s time to focus on the needs of the 83m people who live in Egypt, a country where unemployment is more than 12 per cent and joblessness among young people – at more than 35 per cent – is the highest in the Middle East (see http://edmundosullivan.com/imf-report-highlights-high-unemployment-in-key-arab-states/)
Turmoil since the start of 2011 has devastated Egypt’s tourism industry and discouraged domestic and foreign investment. GDP has stagnated and inflation is in double-digits. Egypt’s budget deficit last year was more than 13 per cent of GDP, the region’s highest. The IMF forecast in May that the deficit will be equivalent to more than 10 per cent of GDP this year and in 2015. There will be a current account deficit in both years as well.
Saudi Arabia’s King Abdullah has now called for an donors’ conference to raise money to support Egypt’s economy. In a statement, King Abdullah said that any country that did not contribute to Egypt’s future would “have no future place among us.”
The Financial Times reported today that Egypt’s external financial needs for the rest of 2014 could reach $9bn. It said that Egypt had asked for as much as $2bn needed to pay for energy imports. Kuwait, Saudi Arabia and the UAE have already promised at least $12bn in aid.
Barclays said in a research report that Egypt could need almost $14bn to meet debt repayments due next year. There’s also fresh urgency behind Egypt’s privatisation plans (see http://edmundosullivan.com/awcs-told-egypt-seeking-to-press-on-with-ppp-projects/)
Politics matter, but economics is now at the top of the Egyptian people’s agenda.
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