Effects of financial crisis on egyptian stock market

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Full Name Comment goes here. Are you sure you want to Yes No. Hazim Salah at Royal academy. Embeds 0 No embeds. No notes for slide. The effect of the economic crisis on egypt 1. Mohamed Khalifa IbrahimESLSCA - MBA 38November 2. The Effect Of The Economic Crisis On EgyptThe Effect of the The global financial and economic crisis has negatively been transmitted to the Egyptian economy particularlyEconomic Crisis since mid This was due to a number ofEconomy factors most prominent of which is the limited integration of the Egyptian banking sector in the global financialA review of the economic crisis impact market.

Moreover, the Central B ank ofon the Egyptian economy between Egypt had succeeded in reforming the - sector since by consolidating the banks into larger conglomerates;Executive Summary restructuring bank management; andThe economic crisis that hit the world getting rid of toxic debts. The Centraleconomy has been unfolding since Bank also introduced stringent rules ofthe end of , and its consequences governance to guarantee theare yet to be understood.

The genesis disciplined functioning of the system. This would imply thatwomen and youth. Unemployment, immediate, short-term actions,which has been a chronic problem necessary as they are, must beeven with the rapid growth of the pre - consistent with, and reinforce thecrisis period, is on the rise.

Moreover, vulnerable unemployment is However, to turn the crisis intoon the rise. Another aspect of the opportunity 3 tasks are necessary: Africa, Egypt is divided by the greatEqually important is the vulnerability of fertile Nile valley, where the economicthe "near poor" to external shocks activities take place.

The Effect Of The Economic Crisis On EgyptAnwar EL-SADAT and the former The modern Egyptian economypresident Mohamed Hosni Mubarak. Import substitution andfrom a base of 3. Nationalization reducedThe impact of the U. Inter-War, —, adverselyof the world, as the GOE is still able to affected the performance of themaintain a growth rate of 4.

The budget deficit import substitution. Openness Euphoria, —predominately due to reduced growth during which policies werein export-oriented sectors, including introduced to encourage Arabmanufacturing and tourism, and Suez and foreign investment through a series of incentives and liberalizingCanal revenues.

External Debt Crisis , —, the external debt crisis and Paris ClubIn , the government spent more re-scheduling and debt reduction. Despite the relatively economic activities. The World Food Crisis, ,the past few years, living conditions soaring food prices, especially forfor the average Egyptian remain grains, led to calls for thepoor. The World Global Financial Crisis , since mid The impact has been —present, Egypt to face the repercussions of the global financi al more pronounced on the real crisis on the national economy.

This was due to a number of The Crisis factors most prominent of which is the limited integration of the Egyptian The global economic crisis that blew banking sector in the global financial up in the US and went beyond to market.

EGYPT FINANCIAL CRISIS | Ruth Badru - icamaveyi.web.fc2.com

This crisis that began by the foreign stock markets. Foreign end of in the developed investors hastened to sell the shares economies and spread into the rest of they own in Egypts stock market to the global economy is the most severe cover their vulnerable financial crisis since the Great Depression of position, especially following their Moreover, The crisis began with the most Egyptian big sub-prime mortgage corporations are listed in problem in the United States foreign markets particularly and culminated in the those of London and New financial crunch, caused York - thus their shares mainly by the accumulation declined with the collapse of toxic debts, and which that hit these markets.

The threatened the banking fact that seventy per cent system in the whole world. The average of countries must join together to Case30 fell from The Effect Of The Economic Crisis On Egyptit fell to Market capital their financial obligations to Egyptianof Egyptian-listed companies fell from hotels, an atmosphere of worryEGP billion in August EGP dominated the field. Such terms of tourism revenues, whichdevelopments resulted in losses below would have a negative impact on per cent of equilibrium value- professions closely linked to tourism.

Yet a greater the same period last year. The yeardecline occurred after mid-September witnessed a 20 per cent drop in following the eruption of the tourism revenues. Should the crisis last,global financial crisis. The short-sightedSector of tourism policy usually pursued by touristBecause the crisis began shortly agencies and companies - i. Although it was estimated Navigation in Suez Canalprimarily that losses would not be feltbefore March , the real picture Since world trade will certainly declinewas bleaker as tourism began to suffer due to the recession, the movement ofin December The Tourism navigation and oil shipping slow down.

Minister said that signs of the crisis Hence shipping through the Suezbegan to express themselves in August Canal negatively affected, thought real losses stared to be particularly when taking into accountfelt in December - by 4.

Secretary General of Chamber started to use the alternative route ofof Hotels said that reservati ons are in the Cape of Good Hope due to thereal decline and great numbers of phenomenon of piracy off Somaliworkers in the sector of tourism are shores. Hence shipping through theexpected to be laid off. When some European tourist September The Suez Canal Authority also notedthat vessel traffic also climbed 2. It has to billion in the same period previousbe noted here that although falling oil year.

The recession will be followed by a declining internalThe global financial crisis cut revenues demand, then a reduction in terms offrom commodity exports due to the production capacities. The outcometroubles experienced by Egypts will definitely be a rise in thetrading partners in Europe and the US. Many slowdown in the growth rate to reachof those came back to Egypt and join 5. Thus the rosy picture Egyptian officials triedForeign direct investments to paint proved unrealistic and theirIt is beyond a shadow of a doubt that claims that the crisis will not goforeign direct investments will fall.

The Effect Of The Economic Crisis On Egyptreach the real economy-proved disciplined functioning of the system. Ministry of Economic Development the impact on the real economy, relegating the impact on employmentPer capita NDP fell and create a and social aspects to a separateclimate of turbulence in view of the section as it is a core issue of thisrevolution of expectations resulted paper.

It should be emphasized at thefrom globalization and advancement outset that the depth of the impact ofin communications technology. When the crisis can best be understood bya poor and unemployed individual is taking into consideration the existingable to know how extravagant lives of structural problems that confrontedthe rich are, social turmoil becomes the Egyptian Economy.

The crisis andvery likely. Macro-economic instabilityEGP15 billion to counterbalance theramifications of the economic crisis. The robust economic growth sinceThe government was keen to convey a contrasts sharply with themessage stressing its aptitude to declining ranking of Egypt on theresolve the crisis. Yet some observers macroeconomic stabilitybelieve that the government allotment competitiveness component of theremains too small to be able to offset Global Competitiveness Index.

Similarly,had succeeded in reforming the budget deficit continued to be asector since by consolidating the challenge despite concertedbanks into larger conglomerates; government efforts to reduce it, whererestructuring bank management; and it stood at 6.

This isgetting rid of toxic debts. In fact, the deficit-to- periods when inflation eruptedGDP ratio has increased to 8.

The effect of the economic crisis on egypt

One of 35the main reasons for budget deficit is 30the increasing bill of public servants, 25wages and of subsidies. This has 20increased from 64 billion LE in to billion in The government has 10managed to reduce subsidies for 5energy, especially for energy-intensive 0industries, but this has been more than -5outweighed by the increase insubsidies for food, health and Source: Egypt, particularly in view of the In the following, a picture of this impactopenness of the economy and its will be outlined.

Inflation rates In contrast to the previous four yearsaveraged 9. The real GDP growth Inflation had been brought which amounted to 7. The Effect Of The Economic Crisis On EgyptGDP growth declined to 5.

This has been due manufacturing, these sectors are notto the decline in the major drivers of typically employment-intensive. Thegrowth especially tourism, position of agriculture is puzzling.

It is expected that the last year. Its share of investment is alsoeconomy will begin its recovery by low 7. An illustration of an examplepropelled by the renewed growth of of these discrepancies is provided inthe global economy and through the the figure below where agriculture andeffect of the stimulus package by the industry are compared in terms of theirEgyptian government designed to contribution to GDP growth, share ofboost domestic demand.

The implication is that the sector Real GDP Growth with the largest labor force share is starved of investment resources and its 8 productivity is low which curtails its contribution to growth.

I M F, I nternati onal Fi nanci al Stati sti cs, Source: Cal cul ated from data provi ded by thequoted by the Economi st Intelligence Uni t EI U , Mini stry of Economi c Devel opment, DecemberLondon, March Unbalanced Sectoral Sources of declining competitiveness in Egypt is Growth due in a large measure to the qualityAn analysis of the sectoral sources of of the labor force, and the efficiencyGDP growth in shows that the of labor market institutions.

Furthermore, of those Level Educationunemployed, The problem is partly createdby the length of queuing period of the Source: Based on data from CAPM AS, Laborschool-to-work transition. In , Force Sa mple Survey, Quarterl y Bulleti n; November The Effect Of The Economic Crisis On EgyptThe irony is that almost half o f those productivity.

Achieving anemployed are either illiterate or improvement in TFP would requiresemiliterate, as they cannot afford to concerted action to improvebe idle; while more than half of those education and to skill the labor force.

Growth is driven more by investment than productivityA strong correlation has beenobserved between investment andGDP growth over the last threedecades. Periods of strong growthperformance were usually associatedwith higher rates of capitalaccumulation, rather than increases inTotal Factor Productivity TFP. Based on data from the Economi st I ntelli gence Uni t, Egypt: It can also be observed that Foreign Direct Investmentchanges were, to a great extent,associated with growth in output perworker.

The average GDP growth ratefor the period as a whole was 4. This analysis reinforces Source: Based on data from Economist Intelligence Unit, Egypt: This can be explained by a pronounced effect early on in thenumber of factors: Sharp Drop in Remittances of GDP, is likely to be reversed. A expected increase in returned study published by the Centre for migration Economic Studies in Egypt estimatesThe global crisis has adversely that around , Egyptian migrantaffected the major sources of demand workers will lose their jobs in the Gulffor Egyptian workers.

Thus the decline by end Exports have been severely hit. The growth rate of exports is expected to slow down by more than a third of its current pace from Although imports are also slowing down from Furthermore as services and transfers drop as a result of the crisis, the current account is being significantly impacted.

Based on Data from the Central Bank of Egypt, -1 Balance of Payments StrainedThe decline in demand for Egyptian Source: He also saidinternational reserves has been that it would cost the governmentamplified.

Effect of the food crisis sufficiency in wheat by Egypt is Food prices jumped 3. The Financial and Economic Crisis: A Decent Work Response: The former trade increase as the economy recoversMinister Rachid Mohamed Rachid said from the global economic crisis.

The Effect Of The Economic Crisis On EgyptI. The wider deficit wa s hold until a new government takesdue to a combination of lower power after presidential electionsrevenues and higher expenditure.

Rising oilTotal revenues and grants fell to The budget deficit for fiscal will be challenging. For high of The stillmeet higher international food and relatively high rate of inflationenergy prices, in addition to a larger represented, however, a significantthan expected wage bill due to ad improvement on the Core inflation, whichpolitical unrest. Total imports fell 2. Imports ofprevious year but the current account services cost USD African Economic Outlook report; www.

The surplus fell to USD Private and officialthe current fiscal year and narrow only transfers increased by Exports of goods fell to USD 25 billion over the past two years Private Sector Developmentas FDI fell to USD 6.

Netportfolio inflows amounted to Over the past five years, the privateUSD 7. As a result, employment. A lack of skilled laborto cover 8. After depreciating in company. However, the Construction permits remain acurrency then began to fall as problem, with the country ranked political unrest and associated capital on this measure despite recentoutflows roiled the markets. The CBE legislation intended to ease the costintervened to support the currency of obtaining permits.

Trading on the withdrawals in February when thestock market was suspended in late banks reopened. Credit to the private sector increased by 7. The asset quality of the Egyptian Apparently, the authoritarian and longbanking system improved with Non - rule of Hosni Mubarak bredperforming loans NPLs falling to government corruption and instigated On 11 February,risk management practices is ongoing.

The Supremebut the political unrest of early Council under General Mohamedsparked very sharp losses and has Hussein Tantawi suspended theclouded the short-term outlook. The revolution impact the presidential elections inThe Jasmine Revolution started in September The caretaker PrimeTunisia December spread to Minister Ahmed Shafik resigned on 3Egypt on 25 January and led to March and replaced by Essam Sharaf.

The of months of will take a heavy tolluprising featured marches, on economic activity in the current FYdemonstrations, strikes and acts of as the turmoil resulted in the loss ofcivil disobedience and climaxed to numerous working days and hours.

Forviolent clashes between protesters instance, the Stock Exchange indefying the curfew imposed by the Cairo, which suspended trading on 29government and security services and January when protests erupted,supporters of Hosni Mubarak.

The Effect Of The Economic Crisis On EgyptManufacturing production alone to We estimated that tourism alone, revenues decline. The primary deficitwhich accounts for a mere 3.

Taxbe a lot weaker than 1. Moreover, fiscal policyInflation inched down to On the month, correct income inequalities.

Financial Crisis of in Egypt by zainab nassef on Prezi

WeCPI rose by 0. Also, wages announced by the formercore inflation dropped to 9. We estimate that the fiscalaccelerating by 8. Y et,food prices will head north followingglobal commodity trends and inflationwill average International Labor Organization International Institute for Labor Studies 7- African Economic Outlook report; AfDB, OECD, UNDP, UNECA; Start clipping No thanks. You just clipped your first slide! Clipping is a handy way to collect important slides you want to go back to later.

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