The Arab world’s second-largest economy, and its largest population, Egypt has endured more than three years of political and economic turbulence which have slowed its performance, but its long-term fundamentals remain strong. Egypt has been through a turbulent time, but still manages to churn out headline growth higher than the Eurozone.
Still, an economy that was growing at a rate of 7% has given way to a more modest GDP expansion of 2.2% in the 2011/12 fiscal year, following the ousting of Mubarak, while foreign direct investment fell by two-thirds over the same period. The figures are likely to remain subdued in the near term but there have been some improvements in cyclical performance, particularly with the country’s capital markets, as 2012 saw Egypt’s exchange grow by 51% year-on-year. More importantly, the country still benefits from significant competitive advantages, including a strong trade profile, a large private sector, a sizable manufacturing base and favourable demographics.