|

Egypt: A tortoise not a hare

In 1845 on the eve of the Great Famine the population of the island of Ireland peaked at about 8 million and then it declined due to starvation and mass emigration to 4.5 million in 1900. Today it stands at 7 million.  In Egypt the officially recorded population for 1882 is 6.7 million. In 1845 it was probably about 4.5 million, in 1900 a little over 10 million and today it stands at 100 million. Thus relative to the island of Ireland since 1845 the population of Egypt has increased 25 times. One could argue that the first reaction in the Islamic World to centuries of stagnation was demographic.

Chart

Also life expectancy has risen and currently stands at 72 years compared with 80 years in the EU.

Chart

Egypt consumes about twice as much cement per capita as the US indicating that it is undergoing a vast construction boom. However of the one million housing units constructed per year some 70% are in the informal sector without proper planning permission, 20% are in the private formal sector and 10% are public housing. It will represent a challenge in future years to bring the majority of housing construction into the formal sector with planning permission, building regulation and clear legal title.

Egypt consumes about two thirds as much electricity as Italy such that it’s per capita electricity consumption is about 40% of Italy’s and this is as good an indicator of overall living standards as any other – about 40% of the EU. Electricity output has increased threefold since the Millennium or about a rate of 6% per annum. At this rate of growth Egypt should catch up with the EU just after  2030. Egypt is not as advanced industrially as Turkey with the motor and steel industries considerably smaller but is somewhat ahead of Morocco. There are some expectations that investment from China can drive the manufacturing sector in the coming decade.

Chart

Thus though Egypt’s economy is not comparable to the Asian tigers it’s achievements should be seen in the context of it’s considerable demographic expansion. The fertility rate has fallen in recent years such that the rate of population growth will slow but at 3.3 per woman is still above replacement rate.

Author

Paul Dixon

Paul Dixon

Latin Report

Paul Dixon’s focus is economics from a long term perspective.

More from Paul Dixon
Share:

Editor's Picks

AUD/USD flatlines near 0.6965 as less hawkish RBA counters USD weakness

AUD/USD holds steady above a two-week low, trading near 0.6965 in the Asian session on Wednesday as early midterm election results heighten political uncertainty and weigh heavily on the US Dollar. Moreover, reviving safe-haven demand triggers a fresh leg down in US bond yields, offsetting Fed hike bets and exerting additional pressure on the buck. However, a less hawkish RBA caps the Aussie.

USD/JPY declines below 158.00 as USD weakens on midterm election results

USD/JPY comes under heavy selling pressure on Wednesday, dropping below 158.00 during the Asian session as the US Dollar slumps to a one-month low amid heightened political uncertainty after early US midterm vote counts. Moreover, the prospect of gridlock in Washington drives safe-haven flows, triggering a fresh leg down in US bond yields and further weighing on the buck.

Gold clings to gains near weekly top, comfortably above $4,000 as US elections hit USD

Gold clings to strong intraday gains near the weekly high, trading comfortably above the $4,000 psychological mark during early European session amid a broadly weaker US Dollar. Democrats’ wins in the House and Senate raise the prospect of gridlock in Washington. Moreover, heightened political uncertainty drove investors to safe-haven assets, exerting downward pressure on US bond yields. This is seen weighing on the Greenback and supporting the precious metal.

Bitcoin tests critical support, Ethereum struggles below resistance, XRP extends losses
Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) remain under pressure on Wednesday as bearish momentum continues to weigh on prices. BTC approaches key support around $76,466, and a decisive close below could open the door to deeper losses. Meanwhile, ETH struggles below key resistance while XRP faces rejection at the upper trendline of a falling channel pattern, all hinting at deeper losses.
US Dollar Index dives to late September lows near 101.25 on US election results

The US Dollar Index, which tracks the Greenback against a basket of currencies, comes under intense selling pressure during the Asian session on Wednesday, dropping to its lowest level since late September as early US midterm election results heightened political uncertainty.

The 2% inflation target came from a throwaway remark. It now moves trillions
The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.