CONSTRAINTS AND DETERMINANTS OF THE ECONOMIC GROWTH IN EGYPT

In north Egypt, the Nile delta, where most Egyptian economic activity, takes place. The last 30 years , the government has reformed the highly centralized economy it inherited from president Gamal Abd El Naser. During the 1990s, a series of international monetary, fund arrangements, coupled with massive external debt relief resulting from Egypts participation in the gulf war coalition , helped Egypt improve its macroeconomic performance .Since, the turn of the new millennium ,the pace of structural reforms, including fiscal ,monetary policies ,privatization and new business legislation , helped Egypt to move towards a more market oriented economy and prompted increased foreign investment. The reforms and policies have strengthened macroeconomic annual growth results with average 5% annually the benefits of growth have failed to trickle down to improve economic conditions for the broader population, especially the growing problem of unemployment and underemployment among youth under the age of 30 years. A youth protest, demanding more political, and delivering improved living standards forced President Mubarak to step-down on February 11, 2011, and Egypts economy, paid a heavy price during 18 days of protests. The government statistics authority, said in a February 17, 2011 statement carrying on the official state news agency MENA , that the revolution bad cost the tourism, construction and manufacturing industries a total of at least 10 billion. Between January 28, 2011 and February 5 , 2011 ,production in key industrial zones dropped down by 60 percent and the construction section alone lost L.E.762 million. The Egypts contemporary economic problems, is the inability of Egypt to control external , affecting its economy, makes structural internal economics imperative . Domestic economic problems, at present include the rise in both disguised , and open unemployment , low productivity ,high rate of inflation, government facing deficit financing unaffordable subsidy programs ,deficit in the balance of payments, accumulating public debt, the lack of adequate

domestic investments ,the acute storage in housing, price disequilibra, and, in general, low rates of real economic growth ,often even leading to negative per capita real growth rates. Today, Egypt should maintain its freedom, to consider, a wider range of alternative fiscal, monetary, financial and trade policies, many of which could proactivevely generate higher GDP growth, more employment , greater tax revenues, and increased public investment as a percentage of GDP all of which will be essential for creating the millions of jobs needed and closing the income gap over the longer- term .