Economic growth in eygpt Assignment Example | Topics and Well Written Essays - 500 words

Economic growth in eygpt - Assignment Example Egypt’s economic growth still faces numerous risks with high political, economic, and security risks. The country also registers a significant tax and oppression risk and medium legal risks. However, the country seems to be on a positive trend despite the evident risks. The forecast summary presented in the report highlights that the country’s economic outlook is better due to the political stability resulting from the May 2014 elections. The country is also experiencing an unexpected rate cut by the central bank of Egypt, a factor that defines Egypt’s highly dynamic economic environment. Worth noting is the fact that the exchange rate risks in Egypt have also soared immensely (Country Reports: Egypt, 2015). The IHS report predicts that Egypt’s economic growth is likely to register acceleration in the medium term outlook. However, the long-term economic growth may be adversely affected by the risks mentioned above. The Country’s Gross Domestic Product (GDP) has also surged in the first quarter and is likely to improve because of the political stability witnessed after 2014 elections. The country also receives financial aids from the Gulf countries. According to the report, the consumer demand is likely to face challenges because there is still an ongoing crisis. In case of capital investment, the country will register reduced inflows of foreign direct investment because of the political and security risks. However, more direct investment from foreign countries may be registered in the future when the country’s economic landscape stabilizes. Although the government is making efforts to promote foreign investments, political uncertainties are serving as a backlash (p. 10). Egypt’s labor market reveals that the conditions will be poor in the short-term until there is economic stability. Egypt’s inflation rates are likely to reduce because commodity prices have decreased remarkably. As mentioned above,