Interpreting Middle East Economic News and Analyzing Market Trends

Category: Egypt

‘Bikinis and booze are welcome in Egypt’ as Brotherhood chooses money over religion

Sharm El-Sheikh, Egypt – Source:  Treehugger.com

It’s no secret that Egypt is short on cash these days.  Qatar and Libya have already pumped in billions to help support the economy.  However, discussions with the IMF have not gone so well and the $4.8 billion loan (expect Egypt to ask for even more) is on hold for now.  What’s a new cash-strapped Islamist government to do?  For starters, they can promote bikinis on the beach and booze at the bar…

 

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Egypt hopes to close budget deficit in the coming years, but how?

With all the negative economic news coming out of Egypt these days, one has to wonder how the government plans on getting out of the hole it’s in.  The Finance Ministry recently announced that it plans on lowering the budget deficit from 10.7% this year to 5.5% by 2016.  It’s good to see that the government is optimistic on reaching this target, but it is not known how it will get to it.  Read our earlier post Top 10 reasons why Egypt is headed for economic disaster to see why Egypt will not reach this target.

 

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HSBC mulls Iraq exit as management continues to flip-flop on its strategy

HSBC Bank, which took a hit on its earnings last year to settle allegations of money-laundering in the US, is still trying to stay focused after several poor decisions made over the past decade.  See our earlier posts here and here for details.  Management’s latest strategy move is trying to determine whether or not to stay in Iraq.

  

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Qatar backtracks on aid to Egypt, Libya joins in and gives Egypt $2 billion interest-free loan

Qatar has had a change of heart on giving more aid to Egypt.  Last month, Qatar announced that it was not going to give Egypt additional aid after pumping $5 billion into the country.  See our earlier post on this here.  Libya also joined in and is giving Egypt a $2 billion interest-free loan, which would have been unheard of before the Arab Spring.  Here’s the story from Reuters:

 

Arab allies Qatar and Libya gave cash-strapped Egypt a $5 billion double boost on Wednesday as the Arab world’s most populous nation struggles to secure an IMF loan to ease its deepening economic crisis.

Qatari Prime Minister Sheikh Hamad bin Jassim al-Thani said after talks with Egyptian Prime Minister Hisham Kandil that Qatar would provide an extra $3 billion on top of some $5 billion the Gulf state has already given Cairo, and would extend gas supplies to Egypt this summer as needed.

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Top 10 reasons why Egypt is headed for economic disaster

Since the end of the revolution in 2011, there has been a lot of optimism on Egypt’s future.  In 2012, Egypt witnessed a democratic election which signaled an end to decades of Mubarak’s authoritarian rule.  The military stepped down and allowed a democratic transition to take place.  For the first time many Egyptians felt hope and optimism that the future will be much brighter for them.  This optimism was felt outside Egypt as well as foreign investors began looking at investing in Egypt.  Middle Eastern investors took the opportunity to snap up Egyptian banks.

This optimism, however, has now faded as the difficulty in transitioning to democracy became apparent.  Since President Mursi took office, things have been going down hill for the country.  Egypt faces enormous challenges, which few are willing to discuss much less attempt to address.  This is why we see Egypt headed for economic disaster.  Here are the top 10 signs that show why the country is facing such an ugly future:

  

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