Paper
Ibrahim Saif, Ahmed Ghoneim
{
"authors": [
"Ibrahim Saif"
],
"type": "other",
"centerAffiliationAll": "",
"centers": [
"Carnegie Endowment for International Peace",
"Malcolm H. Kerr Carnegie Middle East Center"
],
"collections": [
"Arab Awakening"
],
"englishNewsletterAll": "",
"nonEnglishNewsletterAll": "",
"primaryCenter": "Malcolm H. Kerr Carnegie Middle East Center",
"programAffiliation": "",
"programs": [],
"projects": [],
"regions": [
"North Africa",
"Egypt",
"North America"
],
"topics": [
"Economy"
]
}
Source: Getty
The Global Slowdown and Egypt's Economy
The overall impact of the global downturn on Egypt is that it creates deflationary expectations. As a result, domestic and foreign investors prefer to wait until the dust settles before they make their investment decisions.
By Ibrahim Saif
Published on Dec 12, 2011
What effect has the global slowdown had on Egypt's economy during its political transition?
The overall impact of the global downturn is that it creates deflationary expectations. As a result, domestic and foreign investors prefer to wait until the dust settles before they make their investment decisions.
The global slowdown has had a negative impact on the inflow of foreign investment, from both the Gulf countries and the broader international market. This has been associated with a decline in worker remittances, which constitutes nearly 10 percent of Egypt’s national economy.
The global slowdown has had a negative impact on the inflow of foreign investment, from both the Gulf countries and the broader international market. This has been associated with a decline in worker remittances, which constitutes nearly 10 percent of Egypt’s national economy.
Read more
Moreover, tourism—a significant sector in Egypt employing almost one-quarter of the labor force—has been crippled by a combination of the global slowdown and security concerns.
Exports of goods have declined as a result of a declining global demand and a decline of government support for exporters, including low tax rate and credit lending. The cost of lending, in terms of the borrowing interest rate, has reached nearly 11 percent, which is extremely high especially with the high degree of instability.
All of this has resulted in a tight lending policy at a time when liquidity is most needed, hence complicating the transitional period.
Exports of goods have declined as a result of a declining global demand and a decline of government support for exporters, including low tax rate and credit lending. The cost of lending, in terms of the borrowing interest rate, has reached nearly 11 percent, which is extremely high especially with the high degree of instability.
All of this has resulted in a tight lending policy at a time when liquidity is most needed, hence complicating the transitional period.
About the Author
Ibrahim Saif
Former Senior Associate, Middle East Center
Saif is an economist specializing in the political economy of the Middle East. His research focuses on international trade and structural adjustment programs in developing countries, with emphasis on Jordan and the Middle East.
- The Private Sector in Postrevolution Egypt
- The Economic Agenda of the Islamist PartiesPaper
Ibrahim Saif, Muhammad Abu Rumman
Recent Work
Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.
More Work from Carnegie Europe
- Rewiring the South Caucasus: TRIPP and the New Geopolitics of ConnectivityArticle
The U.S.-sponsored TRIPP deal is driving the Armenia-Azerbaijan peace process forward. But foreign and domestic hurdles remain before connectivity and economic interdependence can open up the South Caucasus.
Thomas de Waal, Areg Kochinyan, Zaur Shiriyev
- Planetary vs International Security: Economic Growth at the CrossroadsResearch
Economic growth is at the heart of a dilemma between planetary and international security.
Olivia Lazard
- Europe and the Arab Gulf Must Come TogetherCommentary
The war in Iran proves the United States is now a destabilizing actor for Europe and the Arab Gulf. From protect their economies and energy supplies to safeguarding their territorial integrity, both regions have much to gain from forming a new kind of partnership together.
Rym Momtaz
- How Europe Can Survive the AI Labor TransitionCommentary
Integrating AI into the workplace will increase job insecurity, fundamentally reshaping labor markets. To anticipate and manage this transition, the EU must build public trust, provide training infrastructures, and establish social protections.
Amanda Coakley
- Taking the Pulse: Can the EU Attract Foreign Investment and Reduce Dependencies?Commentary
EU member states clash over how to boost the union’s competitiveness: Some want to favor European industries in public procurement, while others worry this could deter foreign investment. So, can the EU simultaneously attract global capital and reduce dependencies?
Rym Momtaz, ed.
