CAIRO: Egypt's unemployment rate reached 8.92 percent during the second quarter of the current fiscal year, down slightly from 8.94 percent the previous quarter, official figures show. According to the Central Agency for Public Mobilization And Statistics (CAPMAS), the unemployment rate was at 9.4 percent during the same quarter last year. The number of unemployed Egyptians was estimated at about 2.3 million for that time period, a decrease of about 8,000 from the prior quarter and a decrease of approximately 45,000 from the previous year. However, given the recent events and current economic conditions, as well as thousands of Egyptians returning from neighboring countries, the number has probably increased and may rise steadily through the coming months. High unemployment rates — which analysts claim are higher than the official figures, especially among the nation's youth — are one of the main economic stresses that led to the January 25 Revolution, which ousted president Hosni Mubarak. “Unemployment had actually improved up until December 2010 as official figures suggest,” said Mohamed Rahmy, research analyst at Cairo-based investment firm Beltone Financial. “However, the recent events are likely to cause a reversal in this improvement and pressure the unemployment rate to increase,” he added. Cairo University economy professor Alia El-Mahdy agreed that figures will likely see an upward trend. “Already a lot of companies are working under capacity and reducing the number of workers and this is with no new investments coming in the country right now,” she told Daily News Egypt. El-Mahdy attributes ongoing strikes and disruption in business activity to the current unstable situation. If the situation worsens and companies start laying people off en masse, it will be difficult for the economy to support them, adding more stresses to an already burdened market. It also makes it more difficult for new entrants to find work. Rahmy cited CAPMAS head Abu Bakr El-Guindy as reporting 90 percent of those who are unemployed (3.2 million total) have completed their higher education and secondary school. Another contribution to the inevitable increase again in unemployment will be the return of Egyptians from Libya and other countries, who are mainly of semi and unskilled levels. Rahmy suggests that this will pressure the economic situation even more and add a great deal of challenges ahead. “I think that by the end of this year, unemployment rate in Egypt will reach at the very lease 11 or 12 percent or even higher,” El-Mahdy said. “I don't think we will be able to keep it under 10 percent at all due to the current situation.” El-Mahdy suggests that the government may help by placing more security on the streets and reinstating police so people are not afraid to work and open business. “If the government places more security around the streets, people will feel comfortable to work once again and companies will restart businesses again as well as showing investors their commitment,” she said. In other news, the Ministry of Finance has been reportedly processing an estimated five million job applications that it has received as part of a nationwide employment program. The state news agency MENA quoted Finance Minister Samir Radwan as saying that Egypt's economy has not collapsed even though macroeconomic indicators may not be entirely satisfactory. Egypt cut its forecast for GDP growth rate and is preparing to see a higher budget deficit this year.
