Egypt is the most populous country of the
Middle East but at the same time one of the poorest.
Main sources of income are oil and gas exports, tourism
and revenue from the Suez Canal. They are largely
managed by public authorities and are dependent on
external factors. Politically, the country has moved
from socialist central government to greater market
orientation, but the military has a key role in the
country's business. The upheavals that started in 2011
created major disruptions in the economy.
Egypt has the best educated elite in the region, but
the majority of the workforce is poorly trained. The
informal sector (black jobs and more) is very extensive.
Economic development has been hampered by rapid
Population growth, which has put severe pressure on the
scarce cultivation area and the limited water resources.
Many who have higher education guest work in other
countries, including Saudi Arabia.
Major imports by Egypt, covering a full list of top products imported by the country and trade value for each product category.
Trade liberalization, privatization and deregulation
had positive economic effects in the early 2000s, but at
the same time increased unemployment. The regime's fear
of social unrest in rising unemployment led to subsidies
on food and energy, despite plans to phase them out.
Growth was around 7 percent a year from 2005 to 2008.
The global financial crisis caused growth thereafter to
decline, due to falling revenues from the tourism
industry, exports and the Suez Canal, as well as reduced
cash flow from overseas Egyptians.
Egypt still managed quite well. The government
launched three major stimulus packages, and with a
relatively broad economic base and large domestic
consumption, the country was soon on track to the same
growth levels as before the crisis.
Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including EGY which represents the country of Egypt.
Then followed the political turbulence that began in
2011. The stock market and banks closed, many businesses
were hit hard and tax revenue fell. The tourist stream
collapsed. The foreign exchange reserve was depleted,
the Egyptian pound reached bottom levels and needed
investment in agriculture and industry stopped. Growth
fell below 2 percent in 2011 and was only slightly
higher in the following shaky years. After the 2013
military coup, many western countries frozen aid for a
Money shipments from overseas Egyptians fell sharply
as several countries rocked during the Arab Spring.
Around 300,000 Egyptians are estimated to have returned
home mainly from Libya, where many had jobs in the oil
industry, due to unrest there.
The tourism industry has traditionally employed over
a tenth of the workforce, accounted for around a tenth
of the gross domestic product and constituted the
country's main source of foreign currency. But the
industry has been going strong, mainly because of the
terrorism that has caused several declines since the
second half of the 1990s. The outlook was bleak after an
attack on a Russian passenger plane in 2015, but since
then the Russian-Egyptian contacts have improved.
Several collaborative projects have been presented (see
Calendar). Following the 2015 attack, Britain also
stopped direct charters to the tourist resort of Sharm
el-Sheikh, but flights resumed in 2019 when the British
considered that Egypt had managed to tighten security at
The situation was also stabilized and growth
increased. Improved business climate, sharply reduced
fuel subsidies, growing natural gas revenues and
expansion of the Suez Canal were contributing causes.
About a tenth of the world's merchandise passes through
the channel. It took ten years to build and was
completed in 1869. The Suez Canal allowed ships to
travel between Asia and Europe without circling Africa -
a travel shortening of about 700 miles. After the
expansion, which was completed in 2015, the capacity is
said to have doubled, so that close to 100 vessels a day
can pass. A bridge over and a road tunnel under the
canal connects Africa to Asia.
At a major international conference in Sharm
el-Sheikh 2015, Egypt received major loan and investment
promises. Arab states in the Gulf of Persia promised
direct investment for just over $ 36 billion. Loans were
also decided for, among other things, a power plant of $
18.6 billion. International lending institutions pledged
SEK 5.2 billion in loans. The government saw the pledges
as a strong support for its fight against militant
At the conference, the government presented plans to
build a brand new capital east of Cairo. The foundation
stone was laid in 2018 and the investments are based on
large loans from China, with the practical participation
of Chinese state companies, although the Egyptian
military's business empire has a key role in the
project. Among the buildings to be built is a railway to
In 2018, Egypt was given the go-ahead to continue
raising loans from the International Monetary Fund (IMF),
which in 2016 placed a loan package of a total of $ 12
billion over three years in view. However, the IMF
demanded austerity that has become noticeable to
Egyptians: VAT has been introduced and electricity
prices have gone up. When the subsidies on fuel were
abolished (June 15, 2019), it was decided to exclude
fuels used for electricity production - and for
bakeries, as price increases on basic foods can trigger
strikes and demonstrations. When the loan expired at the
end of 2019, the Egyptian leadership was praised for
having implemented reforms and achieved growth.
The reforms included that the currency was allowed to
float from the end of 2016, and the Egyptian pound lost
much in value. But the pound fared better than many
other currencies in the turmoil that spread in the
markets when the Turkish economy hit in crisis 2018.
In the fall of 2019, inflation was reported at a low
of 2.4 percent, a dramatic improvement over a year
earlier when, according to the country's statistical
authority, it was up 17.5 percent. Various explanations
were given: firstly, increased agricultural production
led to lower food costs (food accounts for almost half
of household expenditure) and secondly that the value of
the pound against the dollar stabilized.
The budget deficit decreased to 9.8 percent of GDP
in 2018. Government debt was declared in 2018 to just
under 93 percent of GDP, also a decrease. In early 2020
(growth in an interview survey conducted by Reuters),
growth of almost 6 percent was forecast during the year.
But that was before the coronavirus had led to the
pandemic that has subsequently created dark clouds and
great uncertainty about the economic future worldwide.
The results achieved have been achieved by a
military-dominated regime. And the role of the state,
especially the military, in business is also one of the
worrying factors that characterize Egypt's economy. It
is there, not in the private sphere, that the wheels
have rolled. And behind the impressive figures shown
there is also a flip side: About twice as large a
proportion of Egyptians live below the poverty line now
as at the turn of the millennium, according to the World
Egypt has a large deficit in its trade with the rest
of the world, while imports are significantly higher
than exports. Food, machinery and transport equipment
are important import goods.
Oil production is declining, but natural gas,
previously only used in the country, has started to
export during the 2000s (see Natural Resources, Energy
and the Environment). Agriculture's share of exports has
gradually decreased, from over 70 percent a few decades
ago to just over 10 percent. But cotton, textiles and
ready-made clothing are important commodities.
The EU is the largest trading partner, although China
is now the single largest importing country.
Trade with the EU is facilitated by an association
agreement from 2004 and barriers to trade have gradually
been resolved. The United States offers duty free for
goods with a certain amount of Israeli content. Egypt is
a member of the World Trade Organization (WTO) and works
for a pan-Arab customs union. Trade in the region has
increased in recent years, as has the exchange with
India and not least China. A free trade agreement with
the South American trade block Mercosur was signed in
2010 with the aim of eliminating customs duties within
Egypt also participated when 44 African states signed
a new free trade agreement, AFCFTA, in March 2018. The
agreement must be ratified at national level before it
can enter into force but is seen by many as an important
step towards increased trade exchange within Africa.
FACTS - FINANCE
GDP per person
US $ 2,549 (2018)
US $ 250,895 million (2018)
5.3 percent (2018)
Agriculture's share of GDP
11.2 percent (2018)
Manufacturing industry's share of GDP
16.3 percent (2018)
The service sector's share of GDP
51.4 percent (2018)
13.9 percent (2019)
Government debt's share of GDP
92.7 percent (2018)
US $ 82,886 M (2017)
US $ 28,046 million (2018)
US $ 57,635 million (2018)
- US $ 6 293 million (2018)
Commodity trade's share of GDP
40 percent (2018)
Main export goods
oil, food, clothing, textiles, cotton yarn, iron and
Largest trading partner
EU, USA, Libya, Saudi Arabia, China