CAIRO: On the contrary of optimistic economic expectations raised in recent months, the businesses performance report, issued by the International Business Monitor, expected a decline in Egypt's economy in the long-term. The report attributed its expectation to political unrest in which Egypt has been in since Mubarak's resignation. The report expected the private sector will dominate Egypt's economy during the next ten years and consequently a notable increase in flow of direct foreign investments. The report pointed out political tension in Egypt poses a threat to Egypt's long-term expectation of growth. It is expected it may be difficult for consecutive governments to attract foreign investments, which could impede economic growth. Despite pessimistic expectations, the report views Egypt as an emerging and promising market with strong local demands. It reported Egypt's strategic and cultural position, in addition to its Islamic identity, are all-important factors to attract foreign investments from the Gulf Cooperation Council (GCC). The report added the mentioned factors will push Egypt's economy to achieve growth, according to international criteria. It assured expectations will achieve 4.6 percent economic growth from 2011 until 2020, enough to support direct foreign investments. On the other hand, the report believes socialist heritage is a main challenge threatening investments in the current stage, which could lead to a big deficit in the budget. The report expects the deficit will reach its peak at the end of the current fiscal year of 2011-2012, at a record of 10.2 percent of Egypt's GDP. However, the report is optimistic about expected increase in Egypt's gas production to 95 billion cubic meters in 2020, which would provide the country with more hard currency and would reduce importations. The report also expected Egypt's tourism and Suez Canal to strongly contribute to Egypt's economy within the next few years. The report expected the deficit in trade balance will remain until the year 2020 because of increasing local demand to import capitalist commodities.
