EGYPTIAN PRIVATE SPENDING BOTTOMS OUT.

PositionNo significant increase in real income is expected first three quarters of 2003 - Brief Article

It appears that private sector demand for Egyptian goods and services bottomed out during 2002, but feeble growth should emerge during the first half of 2003. Purchasing power has not improved over the past couple of years, making Egypt an increasingly price-sensitive consumer market.

A third of Egypt's population is below the age of 14. They constitute a youthful consumer base with considerable growth potential. With purchasing power parity per capita of less than US$4,000 per annum, most Egyptian households are very limited in their discretionary spending. Real income is not likely to increase significantly through the first three quarters of 2003, but a gradual and sustainable increase should manifest itself starting in the fourth quarter.

Roughly a quarter of Egypt's population lives in poverty and at least another quarter is locked into the informal economy. As a result, about half of Egypt's households lack the income stability needed to make high-end purchases. With employment stubbornly high and consumer confidence weak, household expenditure on durable goods will...

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