Egyptian revolt hits economy



Protests costing Egypts economy

Protests costing Egypts economy

The revolts in Egypt may have changed the political situation in the country, but it has come at the cost of the economy.

The crisis is reportedly cost the country 310 million dollars daily since it broke out on the 25th of January, and is keeping tourists and foreign investors away from the country.

Egypt was already suffering from high unemployment and inflation before the revolt, and it has only gotten worse since. The growth forecast for 2011 has been lowered from 5.3 percent to 3.7 percent.

The government has taken steps to kick start economic reform, and has its public debt under control. The growth has been bolstered by foreign investment and oil and gas exports.

Despite this, 40 percent of the country lives on two dollars a day or less, and the ongoing protests will cause more problems and further weaken the economy.

Banks and business have been mostly shut down for ten days, which has lead to a 6 percent drop in exports.

The stock exchange in Cairo is set to reopen after two weeks closure, which was caused by two days of trading that saw losses of 70 billion Egyptian pounds (12 billion Dollars)

“Prolonged political uncertainty and perceived violence could have a destructive impact on tourism earnings this year,” said Credit Agricole in its report on Egypt.

Tourism brought 13 billion dollars in to the country last year, with a record 15 million people deciding to take their holidays in the country.

World Travel and Tourism Council spokesman Elliott Frisby said “Losing the winter season could mean more significant repercussions, especially if coupled with a possible summer downturn as customers, planning and booking trips now, are put off by news coverage,”

There is also worry for investors in the country, who rely on foreign earnings as they will also be put off by the scenes shown on the news. There is also Mubarak regime’s almost total cutting off of Internet access for five days.

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