During the 1990’s, a series of structural reforms including, Egypt’s privatisation and new business legislation helped Egypt propel itself to a more market-oriented economy and since the turn of the millennium has prompted foreign direct investment. Many large MNCs (Multi National Corporations) have now established a base in Egypt including household names such as Vodafone and Microsoft. Plus several other large organisations now have a major presence due to the growth of the market.
Located in a central position with direct access to Africa, Europe, Asia and the Middle East, Egypt has attracted numerous large manufacturers due its strategic geographical location. Standing strong, Egypt is also one of the best performing economies in its locality resulting again in high levels of FDI.
From 2004 to 2008 Egypt aggressively pursued economic reforms to attract foreign investment and also to facilitate GDP growth. The international economic downturn slowed Egypt’s GDP growth to 4.5% in 2009, predominately affecting export oriented sectors, including manufacturing and tourism.
In 2009 however the government implemented a $2.7 billion stimulus package favouring infrastructure projects and export subsidies, and is considering up to $3.3 billion in additional stimulus spending in 2010 to mitigate the slowdown in economic growth. The current government has started economic reforms to attract foreign investment, boost growth, and improve economic conditions for the broader population.
Tourism is a major factor in the Egyptian economy. According to the Egyptian Economic Development Minister, Osman Mohamed Osman, and the country’s economy recorded its fastest growth in more than a year in the fourth quarter of 2009. Much of this was due to tourism and construction.
Osman stated: “Egypt’s economy expanded by 5.1% while economic growth was 4.9% in the previous quarter. Tourism has certainly grown considerably (more than 13%) and this is the first quarter in almost 12 months that this sector of the economy has grown.