General

Egypt's economy depends mainly on agriculture, media, petroleum exports, and tourism; there are also more than five million Egyptians working abroad, mainly in Saudi Arabia, the Persian Gulf and Europe. The United States as well has a large population of Egyptian immigrants.

The completion of the Aswan High Dam in 1971 and the resultant Lake Nasser have altered the time-honored place of the Nile River in the agriculture and ecology of Egypt. A rapidly-growing population (the largest in the Arab world), limited arable land, and dependence on the Nile all continue to overtax resources and stress the economy.

The government has struggled to prepare the economy for the new millennium through economic reform and massive investments in communications and physical infrastructure. Egypt has been receiving U.S. foreign aid (since 1979, an average of $2.2 billion per year) and is the third-largest recipient of such funds from the United States following the Iraq war. Its main revenues however come from tourism as well as traffic that goes through the Suez Canal.

Economic conditions are starting to improve considerably after a period of stagnation from the adoption of more liberal economic policies by the government, as well as increased revenues from tourism and a booming stock market. In its annual report, the IMF has rated Egypt as one of the top countries in the world undertaking economic reforms.

An Overview

Economy - overview :
Lack of substantial progress on economic reform since the mid 1990s has limited foreign direct investment in Egypt and kept annual GDP growth in the range of 2%-3% in 2001-03. However, in 2004 Egypt implemented several measures to boost foreign direct investment. In September 2004, Egypt pushed through custom reforms, proposed income and corporate tax reforms, reduced energy subsidies, and privatised several enterprises. The budget deficit rose to an estimated 8% of GDP in 2004 compared to 6.1% of GDP the previous year, in part as a result of these reforms. Monetary pressures on an overvalued Egyptian pound led the government to float the currency in January 2003, leading to a sharp drop in its value and consequent inflationary pressure. In 2004, the Central Bank implemented measures to improve currency liquidity. Egypt reached record tourism levels, despite the Taba and Nuweiba bombings in September 2004. The development of an export market for natural gas is a bright spot for future growth prospects, but improvement in the capital-intensive hydrocarbons sector does little to reduce Egypt's persistent unemployment.

GDP :
purchasing power parity - $316.3 billion (2004 est.)

GDP - real growth rate :
4.5% (2004 est.)

GDP - per capita :
purchasing power parity - $4,200 (2004 est.)

GDP - composition by sector :
agriculture: 17.2%
industry: 33%
services: 49.8% (2004 est.)

Labour force :
20.71 million (2004 est.)