How Dependent Is Egypt’s Economy on Gulf Assistance after June 30, 2013

EPC | 01 Nov 2014

Recently, there has been a disparity in the evaluation of the Egyptian economy’s performance between June 2013 and the 3rd Quarter of 2014. Some assessments have painted a bright picture for the performance of the Egyptian economy due to the relevant political stability and presenting huge national projects such as Suez Canal development project. Other assessments painted a grim picture which says that the Egyptian economy is on the verge of collapse due to weak indicators of growth and employment and the growing dependence on Gulf assistance. This proves the need for an objective and brief assessment for the position of Egypt’s economy and point out the available opportunities and related risks in light of the Gulf assistance. This assessment seeks to analyze how dependent is the Egyptian economy on Gulf assistance after June 2013. It reviews the indicators, which called for the flow of Gulf assistance into Egypt, an analysis of the quality of assistance and show points of weakness and strength of this assistance. This assistance depends on chances of the Egyptian economy’s growth such as a safe infrastructure, a strong financial sector and implement micro-economic reforms in 2014. The continuation of this assistance, however, might be influenced by risks related to terrorism, financial deficit and lack of energy resources.

Image Source: Reuters Pictures

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