Egyptian economy struggles to recover

. Xinhua, Cairo
Egypt's economy has shown signs of recovery with increase in tourist arrivals, national income and especially foreign reserves for the first time after a slowdown due to the political turmoil last year.
Some economists say the Egyptian economy starts to improve with such positive indicators in different sectors. But the recovery remains quite fragile due to uncertainties in the country's politics.
The foreign reserves increased for the first time by 100 million U.S. dollars to hit 15.2 billion dollars in April. The foreign reserves have fallen from 36 billion dollars at the end of 2010 to the current level.
Foreign debt decreased by two billion dollars to 33 billion dollars in April compared with the same period last year.
Meanwhile, the tourist arrivals are estimated to increase by 40 percent in the first four months this year compared with the same period last year, according to Tourism Minister Monir Nour.
Egypt witnessed mass protests against ex-President Hosni Mubarak and strikes in various sectors in 2011. The country's tourism revenues fell by 30.5 percent year-on-year to hit 8.7 billion dollars.
Foreign portfolio investment and foreign direct investment reported net outflows of 10.4 billion dollars and 482.7 million dollars respectively, compared net inflows of 10.9 billion dollars and 6.4 billion dollars in 2010.
Nevertheless, the country reported two positive factors-the increase in the remittances of Egyptian workers abroad from 12.5 billion dollars in 2010 to 14.3 billion dollars, and the earnings of the Suez Canal from 4.8 billion dollars to 5.2 billion dollars, according to the Central Bank of Egypt.
The Egyptian pound depreciated by around five percent against the U.S. dollar last year, but has been stable in the past several months.
General Secretary of the Arab Investors Union Gamal Bayomi said these indicated "there is some improvement in the Egyptian economy. "
The improvements in the tourism sector and the Suez Canal income and Egyptian transfers abroad this year, have enhanced the foreign currency in the Egyptian market, he added in an interview with Xinhua.
After a hike of three percent in navigation fees this year, the Suez Canal is expected to earn more.
Bayomi added these indicators aren't enough for a strong recovery. He said the foreign reserves should increase after the government take some measures to reduce the budget deficit.
He worried the reduction of investments in building schools, hospitals and roads in order to decrease the expenditure.
In addition, he was concerned about the challenges that face the Egyptian economy currently.

25 May, 2013 Saturday

Egyptian economy struggles to recover