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Falling oil prices both blessing, curse for Egypt

As the price of oil continues to decline, Egypt stands to both gain and lose: It will save in petroleum subsidies while the job market for Egyptian oil workers in the Gulf, a significant source of remittances, will decline.
A trader works at the Egyptian stock exchange in Cairo, November 19, 2014. The Egyptian pound was flat at a central bank dollar sale on Wednesday but weakened significantly on the black market as Egypt's plans to repay a $2.5 billion Qatari deposit raised concerns of a looming dollar shortage, traders said. REUTERS/Mohamed Abd El Ghany (EGYPT - Tags: BUSINESS) - RTR4EQ3Y
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Egyptian economists are watching the decrease in oil prices with satisfaction and anticipation. Their satisfaction comes from the decrease, meaning a drop in the Egyptian budget deficit, because petroleum products were subsidized by the state to the value of 100 billion Egyptian pounds ($14 billion) during the fiscal year 2014-15. As for the anticipation, the drop will indirectly benefit the Egyptian workers in the Gulf, who are estimated to account for two-thirds of Egyptian workers abroad. Remittances from Egyptians abroad form one of the most important hard currency resources in the country.

There are also concerns about the negative repercussions on the economy of the Gulf oil states supporting Egypt, as well as concerns about the vulnerability of the Egyptian tourism industry, which recently started to recover after instability had damaged the sector.

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