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.
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