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Gulf Cash Gives Jolt of Life To Egypt's Economy

About $12 billion in aid and bank deposits are helping the Egyptian economy in the short term, but structural reforms are needed to sustain the economy in the long term.
A child vendor waits for tourists to sell them souvenirs at the Giza Pyramids, on the outskirts of Cairo August 26, 2013. REUTERS/Youssef Boudlal (EGYPT - Tags: SOCIETY TRAVEL) - RTX12XFC
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There are many questions about the Emirati, Saudi and Kuwaiti bank deposits that started flowing into Egypt and boosting the local economy and production. Many economists said that this Gulf aid is a “jolt of life” for the Egyptian economy and will have a significant role in the coming period in supporting the government amid the floundering economic activity and the lack of production. But others say that the money is just temporary relief, unless it is used to boost the quantity and quality of production.

About $7 billion has been added to Egypt’s foreign reserve balance since July. The money came from three countries: the United Arab Emirates, Saudi Arabia and Kuwait, according to Egypt’s central bank. Those deposits stabilized the financial and economic situation in Egypt. Hisham Ramez, the governor of the Central Bank of Egypt, said that the reserves have reached about $19 billion.

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