- The Cairo government, in a new economic review of the impact of the global recession on the national economy, holds that Egypt indeed could emerge a profiteer from the crisis. Other reports however indicate Egyptians will be negatively affected.
Egypt's Minister of Investment, Mahmoud Mohieddin, this weekend presented his ministry's review of possible effects of the global crisis on Egypt, addressing the 9th scientific conference of the Arab Society for Economic Research. He held that "the global economic developments have some positive effects at the Arab level, mainly the decrease in prices of some foodstuffs which will be of benefit to Arab citizens."
Minister Mohieddin expected that the markets would respond to these changes, adding that the best form of Arab economic cooperation would be through increased investments and joint ventures. He pointed out that Egypt already has big investments in Algeria as well as in Sudan, Syria and other Arab states.
He added that growth is the prime challenge that hinders economic policies. According to the latest assessments of the International Monetary Fund (IMF), Egypt indeed is among the countries world-wide to escape economic growth reductions. Also Prime Minister Ahmed Nazif recently voiced hope that Egypt in 2009 would maintain its economic growth rate between 6.8 and 7.2 percent in line with the past few years.
Egyptian government sources earlier have assured that the country's banking sector is "safe and solid," adding that rigid state regulations and few contact lines with the global financial system had assured Egyptian banks could not collapse.
However, other reports indicate Egypt is already affected by the global recession. Minister Mohieddin already in October warned the tourism industry would be negatively affected as potential tourists are gripped by fear over their economic future. Nevertheless, Egypt's tourism sector - one of the cheapest choices for travellers from Europe and the Middle East - remains competitive, compared to other destinations.
Egyptians are however struggling in the real estate sector, with a large part of completed and planned constructions are made for tourists. The market for holiday homes has collapsed on an international scale, raising fears of increased unemployment in Egypt's construction sector. Finally, the country's export oriented industry could also be affected by lowered demand in markets.
Nevertheless, Egyptian authorities - leaning on their own and IMF analyses - are assured the country will step out of the global crisis strengthened. While consumers in Egypt will see lower prices on transport and food, the Egyptian tourism and financial sectors may be in a good position to conquer greater market shares internationally.
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