Crisis Costs Egypt USD 310 M Daily, 1.6 pp of Projected GDP Growth

World | February 5, 2011, Saturday // 13:36|  views

Protester get warm from a fire at the Tahrir Square after an overnight rally in Cairo, Egypt, 05 February 2011. EPA/BGNES

Egypt's economy loses USD 310 M per day as a result of the continuing civil unrest and protests against President Hosni Mubarak, according to estimates of Credit Agricole.

Thus, Egypt has already lost several billion dollars as the protests entered their 12th day on Saturday.

Forecasts for Egypt's GDP growth in 2011 have been lowered from 5.3% to 3.7% because of the political crisis, while the budget deficit is estimated to go as high as 12.3% of the GDP instead of the previously projected 8%.

Major banks and the central stock exchange have been closed for days, factories in large cities such as Cairo and Alexandria have been closed due to widespread strikes and the tourism industry, usually at its peak during this time of year, has been hammered by the uncertainty and political violence.

Tourism in Egypt account for 6% of the GDP in 2010, but analysts at Credit Agricole have said this may drop as low as 2.5% this year, as visitors leave early and potential visitors choose other locations.

An additional cost in the future will be the exit of capital from the economy as investors pull their assets out of the country due to the ongoing instability and uncertainty.

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Tags: Egypt, Credit Agricole, GDP, civil unrest, street protests, Hosni Mubarak


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