Using Country Stability Indicators to understand Egypt’s economic stability

Janes bespoke Country Intelligence Country Stability Indicators is a powerful quantitative and qualitative enhancement to the PMESII framework and enables you to identify national security flashpoints and destabilising political, economic, and social factors in 184 countries. The socio-political risk faced by the country is quantified on a scale of 0 to 4 as an indicator of a progressing threat up to and including the risk of disorderly government collapse, forceful transfer of power, or fragmentation of state power across the country, which may lead to societal unrest and violence.

Quickly identify the effect of Egypt’s economy on its stability

By looking at the Country Stability Indicators economic model for Egypt we can see that economic risks threaten Egypt’s stability with a score of 2.91 – close to critical.

The Egyptian economy is currently inflexible and in need of liberalisation and reform. The country has a large, fast-growing population with unemployment in the country high at 9.17% with youth unemployment being a particular problem at 23.39%.

How internal and external factors have impacted Egypt’s economy

Lacklustre economic growth in Egypt and unsustainable public debt experienced by the country alongside the political turbulence following the ‘Arab uprisings’ over the prior decade left Egypt ill-prepared for the twin shocks of the war in Ukraine and the impact of the Covid-19 pandemic. As a result, Egypt’s currency collapsed, its exchange reserves were depleted, and inflation sky-rocketed leaving a relatively poor population under severe threat.

In 2020 the International Monetary Fund (IMF) intervened in the country by providing USD8 billion in financing and again in 2022 with a staff-level agreement for USD3 billion.

Fuelled by inflation and economic instability, protests and riots were seen in the country from 2019 to 2022 before a protest crackdown. The risk of political collapse of the Arab world’s most populous country was clear, and this scenario may have played out had it not been for the intervention of neighbouring allies such as the United Arab Emirates (UAE) and Saudi Arabia.