Thursday, April 21, 2011

Egyptian Economy Remains Depressed

The unrest in North African nations in recent months have affected Arab economies very differently. Saudi Arabia and the Gulf states (with the possible exception of Bahrain) have benefited because of the higher oil price. On the other extreme, the Libyan economy has been devastated because of the civil war and foreign bomb attacks.

Somewhere in between, but closer to Libya's fate, is that of Egypt. While its economy have recovered some of the damage inflicted during the worst unrest, both tourism and foreign investments and therefore allover economic output remains well below pre-unrest levels.

If political stability continues and relatively secular forces gain power, then the Egyptian economy will likely soon make a full recovery. If however unrest breaks out again and/or the islamic fundamentalist Muslim brotherhood gains power, then recovery will take a very long time, if it is ever achieved.