Egypt has been battling to resuscitate its economy since 2011; fighting currency depreciation and facing a travel ban from Russia. After letting its pound float and receiving a $12 billion loan from the IMF in November, Egypt is starting to see potential growth in its economy.
The loan is the largest of its kind on record in the Middle East, and came just days after Egypt allowed its pound to float freely in a bid to end a crippling currency crisis that cut the currency's value by more than half and prevented imports of consumer goods that even included food staples such as sugar.
In addition to the loan and the variability in the pound;
The successful sale of Eurobonds has encouraged carry-trade investors who have invested more than $2 billion since the float, as per the Central Bank of Egypt. Egypt's stock market is one the best performers in emerging markets and the best in Africa.
As a consequence of allowing the currency to weaken;
The inflation rate reached 28.1 percent in January on an annualized basis, its highest level since December 1989 and eroding consumers' purchasing power. The spike was largely propelled by a 37.3 percent increase in food prices.
Geographically, Egypt rests at an excellent position to become the next leading automobile manufacturer hub.
The good news is that Egypt's large consumer market and strong logistical network ties to Asia, Europe and Africa makes it a good manufacturing destination. Over time, manufacturing can help the economy's export base, while creating desperately needed jobs for its 90 million inhabitants. Egypt's automotive industry has become one of the largest in Africa, producing more than 100,000 vehicles a year and employing 75,000 workers.
Will Egypt bounce back from its unfortunate economic downfall and emerge as a profitable option for foreign investment?