The Impact Of Economic Reform On Economic Growth In Egypt

Abstract

The aim of the research was to study the Impact of Economic Reform on Economic Growth in Egypt in the short and long terms during the period 1980-2018, the ARDL Bounds Test approach, was used. The Unrestricted Error Correction Model was also used to study the relationship in the long term. The results indicated the existence of a Co-integration relationship in the long term that tends from the Independent Variables (Foreign Direct Investment, Private Domestic Investment, Inflation Rate, Total Government Consumption, Exchange Rate, Dummy Variable) to the Dependent Variable (Economic Growth) during the period 1980-2018. The results also showed Egypt's success in engaging the Private Sector in Productive Investment, which contributes significantly to improving Economic Growth. The Egyptian experience has proven that reliance on the Private Sector in the Investment process contributes to Economic Growth more than the contribution of Foreign Direct Investment to Economic Growth, and that Foreign Direct Investment has a positive role in achieving Economic Growth in Egypt in the long term during the studied period. The process of Economic Reform in Egypt requires a long period of time (about 20 years) to move to an Equilibrium situation in the long term. And Government Consumption in Egypt still needs to be further reformed, as it played a negative role in Economic Growth during the study period.