Egyptian exports began in recovery despite political turmoil
The non-oil exports grew at an annual rate in the double digits since early this year, supported by the depreciation of the pound, despite the violence in the streets and severe uncertainty about the political future of the country.
The export sector in Egypt a little more than ten percent of the total size of the economy and the relatively modest contribution alone can not eliminate the high unemployment or generate sufficient tax revenues to reform public finances faltering.
But the increase in exports, which did not shed the spotlight amid a torrent of bad economic news this year show that many manufacturers have found ways to overcome the political unrest, and they can achieve strong growth if the country received at the end of the day a stable government.
Said John Sfakianakis, investment expert at the holder of the Investment Company based in Riyadh, "It's a good sign that they can achieve this growth in exports, especially in the current environment."
In the energy sector, which constitutes about one-fifth of total exports Egypt sharply reduced natural gas exports, and turned the supplies to the domestic market to avoid blackouts.
And saw Egypt's non-oil exports strong growth in most of the past decade have increased 18.5 percent to 130.1 billion Egyptian pounds ($ 18.6 billion) in 2011, which in the uprising that toppled Hosni Mubarak, according to data of the General Authority for government queries.
The decline in export growth last year, where the election of Mohamed Morsi, who belongs to the Muslim Brotherhood president of the country to increase political tension and move away investments, many companies have been damaged due to strikes in the factories and the deteriorating security situation and fuel crises and the difficulty of obtaining financing.
The non-oil exports grew only two percent in 2012, which is less than half the rate of consumer price inflation. But exports began to recover in early this year and increased by seven percent in the first two months of the year from the corresponding period of the previous year, and rose 15 percent in the first five months of 2013 compared to the same period of 2012 to 65.50 billion pounds.
The Minister of Commerce, Mounir Fakhry Abdel Nour, told reporters, said that non-oil exports jumped 21 percent year-on-year in June, a month which saw huge demonstrations in Egyptian cities big against Anchorage resulted in the army overthrew him in the third of July.
Work atmosphere is still difficult for companies, as was the case last year, but businessmen said that exports of products such as textiles, food, leather products and cost-tech least jumped.
Exports of textiles 16.5 percent in the first five months of 2013 compared with the corresponding period of last year to 2.44 billion pounds, according to the Export Council yarn and textiles, and exports of processed foods 26 percent year-on-year to 2.01 billion pounds in the month of May alone, and reached double Almost as compared with May 2010.
Among the main reasons for the recovery of exports falling value of the pound, which increases their competitiveness, and accelerated the pace of decline in the first half of the year and an exchange rate of the pound currently seven pounds to the dollar, down 9.3 percent from the end of 2012 and 16 percent since the overthrow of Mubarak.
There are also signs that some Egyptian exporters have started to benefit from the rapid growth in demand in other markets, unlike their traditional markets in Europe and Arab countries.
And increased non-oil exports to African countries non-Arab 28 percent in the first five months of 2013 from a year earlier to 4.85 billion pounds, and increased exports to Arab countries, 20 percent to 27 billion pounds, supported by economic recovery in Libya after the end of its civil war.
It is not clear how long will benefit Egyptian exports of a weak currency, and many analysts believe that the pound is still higher than its value and its fair price is about 7.5 pounds to the dollar, and in light of the pressures on the economy is almost certain to provide back down to this level, further support for exports.
But the Egyptian authorities may resist further decline in the value of the currency However for foreign cash reserves to support an aid package worth $ 12 billion of Gulf Arab states this month, the authorities are in a better position to do so from the previous government, which was suffering from a lack of liquidity.
Egypt depends heavily on imports of wheat and some raw materials for industry, including low-quality cotton, and although it is a great product for raw cotton but they are not able to manufacture this production competitive.
Among the priorities of the new government also revitalize and attract investment funds that have fled the country, and perhaps this means that keep the currency stable now more important than in normal times.
Sfakianakis said, "double-edged sword currency .. there are costs borne by the economy because of the low value of the currency and there are also benefits .. and the balance between the two is not as easy as in some other economies."
The pound rose slightly in foreign currency auctions put forward by the central bank after the dismissal of Marsa, which may indicate the intentions of the authorities on the currency.
However, even without a further decline in the value of the currency has improved the atmosphere for exporters, vows new economic team of ministers in Egypt on the Elimination of delays caused by bureaucracy and regulatory review and ease the shortage of fuel.
Norhan said Mohsen, a company marketing manager for the export of Egyptian clothing, letters of expressions of interest from American customers increased in the past few weeks.
She added, "foreign customers are still interested Bosaarna" despite the political turmoil in Egypt.
She says, "It seems that the situation this year will be better than last year."
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