Impact of the Currency Devaluation on Contractors in Egypt

Authors: Mariam Zahwy, Waleed El Nemr, A. Samer Ezeldin

Abstract:

In 2016, the depreciation of the Egyptian pound (EGP) had a substantial impact on Egypt's construction industry. Studies assessing this influence are scarce, though. The impact of devaluation on contractors is measured in this study using empirical data. The difficulties contractors have as a result of rising import material costs, limited financing alternatives, and inflationary pressures are also determined by analyzing survey responses from contractors and industry experts. The approaches contractors utilize to lessen the impact of devaluation are also examined in the research. The survey results show how currency depreciation directly affects contractors in the Egyptian construction industry in terms of financial consequences. Inflationary pressures, fewer financing alternatives, and rising expenses have all affected contractors. To minimize losses, contractors have, nonetheless, put a number of tactics into practice. These findings highlight the importance of understanding and managing the impact of devaluation on the construction industry to ensure its resilience and development.

Keywords: construction, devaluation, contractors, material costs, inflationary pressures, empirical data, quantitative research