Egypt’s uprising is costing the country at least $310m (£192m) a day, according to analysis from Credit Agricole bank. Economists at the bank have also revised down their economic growth estimate for Egypt this year from 5.3% to 3.7%. Banks and the stock exchange have been closed for days, and many factories in the major cities have shut. There have also been more food price rises, one reason tens of thousands of protesters were already on the streets. Egypt is still in the middle of its peak tourist season, which commonly lasts until May, but airlines and travellers are shunning the destination.
The report said: “Prolonged political uncertainty and perceived violence could have a destructive impact on tourism earnings this year. Tourism accounted for 6% of GDP in 2010 and… receipts could easily retract to pre-2004 levels of less than $5.5bn. “A shortfall in tourism receipts will have to be addressed by additional budgetary support.” Credit Agricole’s analysts also expect money to start leaving the country. “Local as well as international investors will demand an early exit as political instability and lack of clarity looms,” the report said.
“Those that have not opted for capital outflow strategies over the past few years will do it now,” the analysts said. With the next government facing a shortfall in revenues, coupled with the need to increase subsidies on such things as fuel and food to help quell the popular discontent, Credit Agricole says Egypt’s budget deficit this year could reach 12.3%, up from an earlier estimate of 8.2%. The Suez Canal trade link, which earned Egypt revenues of $4.77bn in 2010, remains open. But Denmark’s AP Moller-Maersk, the world’s largest shipping group, has closed some facilities, including a canal terminal. The French building materials giant Lafarge has also closed plants – BBC