The Actual and Potential Impact of the Global Financial Crisis: A Case Study of Egypt

Abstract

The world economy is currently going through a serious financial upheaval that sparked off in the United States and has spread to Europe and the rest of the world, including Egypt. The severity of the crisis and ongoing uncertainties demonstrate the need for urgent action to restore worldwide financial stability, lead the international economic recovery and secure a sustainable future for all countries. Since the second half of 2008, the negative consequences of the financial crisis began to bite the Egyptian economy in many fields. Egypt's economy growth rate has witnessed setbacks and may post its slowest annual growth in half a decade this fiscal year as the global crisis hits revenue from tourism, migrant labour remittances, the Suez Canal, export revenues, and investment. This paper critically discusses current global financial crisis and its impact on Egypt. It presents an overview of the causes and consequences of the current turbulence on the global economy, followed by an assessment of its depth and impact on sectors of Egyptian economy. Additionally, the paper highlights the actions taken by the Egyptian government to weather the effects of the crisis and concludes some recommendations for Egyptian economy to cope with this crisis.