As Egyptians celebrate the 10th anniversary of the 25 Jan revolution that overthrew the 30-year old Mubarak regime, the country’s turbulent political atmosphere seems to minimally affect the country’s economy, which continues to achieve slow but steady growth.
Even though the last 10 years did not achieve so much of Egyptians’ political hopes, the country’s 8-year old leadership is continuously referring to plans of major economic reforms aimed to relieve decades-long financial crises, including a slightly higher GDP and a long list of projects that have either been completed or are still in the process. But how valid are these claims?
According to government numbers, the Egyptian economy has been growing over the last four years. In 2016-2017, officials are talking about a 4.2% economic growth, while they refer to a 5.6% increase between 2018-2019. Even during the darkest times of the pandemic, the Egyptian economy is said to have grown by 3.6%, a figure slightly lower than the 5.6% that was expected prior to the COVID19 outbreak.
In terms of inflation, government figures also point at a 5.7% decrease between 2019-2020, following a whopping 13.9% during 2018-2019.
GDP wise, Egypt made 5.5 Trillion EGP during 2019-2020, which is even higher than the number of the previous year (5.2 Trillion EGP). In an attempt to explain the steady growth of the Egyptian economy despite a deep global economic shock following COVID19, officials cite the government’s earlier decision to open the economy and limit precautionary measures to wearing masks and limit social events, in a way that doesn’t affect production or trade rates.
The Egyptian pound too had suffered violent drops during the last 10 years, starting from gradual devaluation in 2013, until the government decided to float the currency in November 2016, reducing its value by almost 50%.
However, the COVID19 crisis has ravaged a number of crucial economic sectors in the country, such as the tourism industry, resulting in slashing unemployment figures from 7.7% to 9.6% during 2020.
Despite mounting criticism for Egyptian policies in the years that followed the revolution in 2011, skepticism over the validity of claims of economic reform has been confirmed by a number of international monetary organizations, including Fitch Ratings, the IMF, the US Department of Treasury, and the European Bank for Reconstruction and Development.
How far do you think will Egypt’s economic reforms go? Do you think it will reflect positively on the social and political environment in the country?