There is no need to worry about Egypt's economy or about Egypt going bankrupt, said Ibrahim el-Essawy, an advisor at the National Planning Institute The Egyptian economy is suffering now because of the decline in productivity, which in turn was caused by the imbalance in prices because of the rates of exchange in inflation that resulted from the disruption of Egypt's political arena and the Egyptian Revolution. Essawy said such events would be expected to lead to a decline in production and investment for a while. He also said the political crisis in Egypt did not lead to the destruction of the infrastructure of the economy. Facilities and institutions still exist and there is no reason for them not to resume work immediately once the situation is stabilized, he said. He added that the economic downturn is due to decreasing production and investment, and then lower rates of economic growth. This is reflected in state revenues and the deficit in the budget, which is the difference between expenses and revenues of the state. The deficit this year amounts to around 10 percent, higher than 8 percent the past few years. However, Essawy said the difference is not terrible, especially as the deficit at the end of the 1980's was around 20 percent of GDP and inflation was 12 percent. Sssawy said the problem of public debt inherited from the era of deposed president Hosni Mubarak, around 100 percent of Egypt's GDP, is dangerous but manageable in the short term. He said there was undoubtedly a problem in foreign cash reserves, which fell from U.S. $36 billion to $30 billion in five months, and that this may affect the country's ability to export. However, he said a similar situation occurred in the final years of former Prime Minister Atef Ebeid's administration, when foreign cash reserves dropped from $20 billion to $14 billion – and this did not destroy Egypt's economy.
