The low Egyptian pound has led to soaring exports to the US.
By ADAM GONN / THE MEDIA LINEPublished: JUNE 21, 2010 17:03Advertisement
Egyptian trade to the US has grown by 22 percent in the first quarter of 2010, says the Egyptian Ministry of Trade and Industry.The falling value of the Egyptian pound has resulted in a boost for Egyptian export to the American market, which reached $2.3 billion in the first quarter of 2010, compared to $1.8 billion for the same quarter last year. Data from the Ministry of Trade and Industry shows that the Egyptian trade deficit decreased by 9.5% as exports to the United States increased by 55% to $700 million, while Egyptian imports from the US fell to $840 million, further increasing the American trade deficit.“Egyptian export is very important to our economy,” Abdel Fattah el Gibaly, head of the economic research unit at Al-Ahram Center for Political and Strategic Studies in Cairo told The Media Line.“Export plays the role of the engine in our economy; it’s the source of our Gross Domestic Production [GDP] growth,” he said. Among the main export products Gibaly mentioned was oil, cotton, vegetables and industrial goods.According to statistics from the Egyptian Ministry of Trade and Industry, oil and bioproduct exports generated a total value of $947 million in 2009, while export of fruits and fertilizers was valued at $799 million and $766 million respectively.Egyptian imports from the United States included grains, nuclear reactors, mineral fuels, iron, steel, cereals, oilseeds, aircrafts, cars, electrical appliances, plastic products, weapons, ammunition, photography equipment, dairy products and meat, according the Ministry of Trade.Justin Alexander, an expert on Egypt from the Economist Intelligence Unit disagreed with el Gibaly on the importance of Egyptian exports.“Physical trade is not too major a part of the Egyptian economy,” Alexander told The Media Line.“With imports at about 20% of Gross Domestic Production and exports 10%, hence a 10% [difference],” he said.Alexander explained that the US is not Egypt’s most significant trade partner.“The US is not a particularly important trade partner. The European Union is far more significant,” he said.In February 2010 Prime Minister Ahmed Nazif announced plans to increase the value of Egyptian exports from $14 billion to $36 billion in the next four years. The drive was part of efforts to maintain Egypt’s high economic growth rate, which currently stands at 7%.“The challenge and the goal for Egypt is to keep growing at 7 plus percent,” Nazif was quoted as saying, adding that a lack of infrastructure, transportation and energy in the industrial sector were main factors hindering Egypt’s economic growth.However, during the first years of Nazif’s term as Prime Minister the world enjoyed a period of high trade and investment growth, with global trade flows increasing by an average of 7.7% per year.The Economist Intelligence Unit predicted that, in comparison, world trade growth in 2010 to 2014, would average at about 5.6% per year.
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