Egypt is a significant exporter of petroleum, cotton, and textiles which are all being driven higher by inflation.
Egypt’s export level was $25 billion compared to a GDP of $500 billion in 2010. GDP rose a healthy 5.3% last year, but could be undermined by the current unrest.
Public debt is 80% of GDP which means that there is an increased risk of default on Egypt’s sovereign paper.
The US would be affected more than any nation by a disruption of trade with Egypt. America accounts for 8% of the Middle Eastern nation’s export business, followed by Italy, Spain, Saudi Arabia, India and Syria which are all above 5%.
Egypt’s large import partners are the US and China, both at nearly 10%.
Agricultural commodities prices are rising sharply around the world as a food supplies tighten. The threat to cotton and textile exports from Egypt will only add to global inflation in these sectors.
Douglas A. McIntyre
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