Quote:
Originally Posted by HORIZON
I do not know about the bank laws and protection here, however, I do not see banks getting in difficulty at all.
There can be a problem beacuse of Egypt's dependency on currencies, and while they are unstable as they are, the economy can fluctuate slightly.
However, Egypt at all does not depend on imports, as the economy is supplying itself with practically everything it needs.
I would see a decrease in interest from investors in Europe and mainly the time gap to decide on wether to buy has increased a lot  The tourist flow should diminish slightly. However, the Red Sea area is changing its focus to Russian market, which is turning away from stocks to property markets and the interest is constantly growing. This happens also because the Russian community here is quite big.
Of course financial indicators will be affected by the global recession, however, I see minor impact to Middle East region (however, it will also depend on government economic policies during the period). |
Whilst it is not possible to define the Egyptian economy in a few lines, I think the above is slightly misleading (though I am certainly no economist). Imports - you say Egypt does not depend on these - merchandise imports reached a level of almost US$ 38,000 million against exports which were US$ 22,000 million in 2007.
Egypt earns most of its income from oil, the Suez Canal, tourism, and workers' remittances with some other areas looking promising for the future. (Sources of figures can be seen on Wikipedia - Egypt)
The GDP is rising well around 7-8% growth with inflation now showing at about 12%. I think the real key and to a large extent worry is the population which grew from 65 million in 2001 to some 75 million in 2007/8 and is likely to keep growing at quite a rate. The land and other resources can not sustain this population and it really is a potential time bomb if not handled.
It is also worth mentioning that the income from oil, the Suez Canal, tourism, and workers' remittances is largely out of the control of the Egyptian Economy - and dictated by World events - with the credit crunch all of the above sources of earning look likely to fall.
Of course one can argue that Egypt is in a good position at present and that is to some extent true, but it can be damaged quite quickly by World events.
The point is for me that it's a great place to find the sun, good people (but they must also benefit from our investment) and we can afford the living costs.
For now I'm glad to have invested in a property in Egypt than bought more UK bank shares.
Iain