Egypt’s tourism sector bears the brunt of the unrest

Tourist arrivals to Egypt have fallen back following the country’s “second revolution” and we estimate that tourist revenues in July and August were $600mn lower than in the same months of last year. To put this into perspective, if this was sustained for a year, the loss of revenue would be equivalent to around 1.5% of GDP. Until political stability is restored, tourist revenues will continue to disappoint. While this is likely to exacerbate strains in Egypt’s balance of payments, further aid from the Gulf should prevent a full blown crisis.