24/7 Wall St.

You heard the great hope behind the Arab Spring after riots and coups in Egypt, Libya and elsewhere in Northern Africa and the Middle East. If Egypt’s economic numbers were translated elsewhere into a sports match, it would be “Hope 0, Failure 1.” New riots and protests in Egypt have led for public outcry for Morsi to resign only one year after being elected and in office. It is also an odd situation considering that Morsi was elected under the religious Muslim Brotherhood party. To make matters even more extreme, the Egyptian military has given 48 hours before it takes matters into its own hands.

Morsi is apparently incapable of governing, and the economic change, reform and other hopes that the public had have failed to occur. It is hard to think that unemployment, debt and poverty could have gotten worse, but that has been the case. Even shortages of fuel and other necessities have reportedly become commonplace.

24/7 Wall St. wanted to take a look at the economic statistics to see why the public is so outraged. It turns out that the only people who wouldn’t be outraged are the short sellers (by source):

• -$35.4 billion trade balance for April (Economist)
• -$$5.4 billion current account balance at -2.6% of GDP in Q1 (Economist)
• $1 Buys 7.02 in Egyptian pounds — currency units — versus 6.06 a year ago (Economist)
• Budget balance as a % of GDP is -12.9% for 2013 (Economist)
• Budget deficit of 10.4% of GDP for 2012 (CIA World Factbook)
• 3-month government interest rate 12.7% (Economist)
• Stock market YTD loss through June 26: -15%, but -22.9% in dollars (Economist)
• GDP growth projected to be 2% in 2013 and 3.5% in 2014 (Economist)
• GDP growth in 2012 was 2%, but was flat at $6,600 per capita in 2012 versus 2011 and 2010 (CIA World Factbook)
• Industrial production -0.5% in May (Economist)
• Consumer prices up 8.2% in May and expected to be up 8.4% in 2013 (Economist)
• Unemployment 13.2% in Q1 (Economist)
• Unemployment rate in 2012 was 12.5% (CIA World Factbook)
• Public debt vs. GDP 85% for 2012 and 83.6% in 2011 (CIA World Factbook)
• Reserves of foreign exchange and gold: $15.26 billion in 2012 and $17.66 billion in 2011 (CIA World Factbook)
• The Big Mac Index (Economist) still has Egypt as a “bargain” at $2.57 versus the base value of $4.20 in the United States.

The Market Vectors Egypt Index ETF (NYSEMKT: EGPT) has performed so poorly that it conducted a one-for-four reverse split. Shares closed out at $12.75 on the last day of 2012 and were at $9.47 last Friday (Yahoo! Finance) before the split for a YTD loss of 25.7%. To prove just how poorly Egypt’s economic and market performance have been: the Market Vectors Egypt Index ETF was above $18.50 before the start of the Egyptian overthrow of Mubarek, creating market losses of more than 50% from before the Arab Spring, up to the most recent lows of $9.07 in late June (Yahoo! Finance).

We have only shown the economic side of this. The Economist calls the current situation “More worrying than ever.”

The CIA World Factbook says of Egypt’s economy:

After unrest erupted in January 2011, the Egyptian Government backtracked on economic reforms, drastically increasing social spending to address public dissatisfaction, but political uncertainty at the same time caused economic growth to slow significantly, reducing the government’s revenues. Tourism, manufacturing, and construction were among the hardest hit sectors of the Egyptian economy, and economic growth is likely to remain slow during the next several years.