Egypt is home to more than 75 million people, 56 percent of whom are under the age of 30. The country's economy is arguably the most diversified in the Middle East and North Africa (MENA) region with the services sector accounting for 54 percent of GDP in 2007, industry for 32 percent and agriculture for 14 percent.
In the past four years, effective economic reforms have resulted in the country attracting record amounts of domestic and foreign private sector investment, to the extent that the private sector is now estimated to account for 70 percent of Egypt's GDP. GDP growth rates have been consistently higher than global and regional averages, at more than 7 percent in 2006-07 and 2007-08.
Despite the expected decline in global growth rates, Egypt's economy is on track to stay ahead of the average global economic growth rate, as well as that of MENA. Egypt's growth is expected to drop to around 6 percent in 2009 compared with the global average of 3.5 percent and growth rates reaching less than 1 percent in most developed economies.
Well-informed investors everywhere have taken note of the economic success of this diverse economy. Despite the global slowdown, the country attracted US$ 13.2 billion in FDI in 2007-08, surpassing its previous high total of US$ 11.1 billion in 2006-07.
Government reforms implemented since 2004 have also resulted in the budget deficit dropping three points to 7.5 percent of GDP in 2006-07, and unemployment has dipped to less than 9 percent. Per-capita income has doubled since 2001.
The next challenge will be to keep the reform program on track while tackling inflation, which is in already cooling, and projected to drop to 12-13 percent in 2009.
Looking into the new year and beyond, Egypt's growth hinges on the country's ability to deal with the global economic slowdown. The government is counting on the quality of reforms and diversity of the economy combined with high levels of liquidity in the banking system and continued high inflows of foreign investment to keep the economy moving, a sound strategy so far.
