Egypt WT/TPR/S/150/Rev.1 
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I. ECONOMIC ENVIRONMENT 
(1) MAJOR FEATURES OF THE ECONOMY  
1. Egypt has a territory of 1,001,450 square kilo metres and a population of some 72 million.  
Located in the north-eastern corner of Africa, it is bordered by the Libya to the west, the Gaza Strip 
and Israel to the north-east, and Sudan to the south.   Egypt has a coastline of about 2,450 kilometres 
on the Mediterranean Sea and the Red Sea.  Per capita income was about US$1,120 in 2002/03 (Table I.1). 
Table I.1  
Egypt in figures, 1998/99 to 2003/04  
(Per cent, unless otherwise indicated) 
  1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 
Population (million) 64. 6 65.9 67.2 67.9 69.2 .. 
Employment (million) 16. 9 17.4 18.0 19. 7 18.2 18.7 
Unemployment rate (%) 8.2 7.9 8.4 9.0 9.9 9.5 
Real GDP (at market prices – LE billion) 293.5 309.3 320.2 330.4 340.6 355.7 
Real GDP (at market prices – US$ billion) 86.6 91.2 94.5 97.5 100.5 104.9 
Real GDP annual growth 6.1 5.4 3.5 3.2 3.1 4.4 
GDP per capita (US$) 1,289.4 1,406.1 1,349.3 1,228.7 1,121.9 .. 
Share of  nominal GDP  
Total commodity sector 48.2 49.9 49.9 51.3 51.2 51.8 
Agriculture 17.3 16.7 16.6 16.5 16.7 15.8 
Industry and mining 19.5 19.4 19.1 19.1 18.8 18.4 
Petroleum and products 4.6 7.4 7.9 8.9 9.4 11.6 
Electricity and water utilitie s 1.6 1.6 1.6 2.1 2.1 2.0 
Construction and building 5.2 4.8 4.7 4.7 4.3 4.0 
Total production services 33.1 32.2 32.1 31.5 31.6 31.3 
Transportation 9.2 8.8 9.1 9.0 9.3 9.5 
Trade, finance and insurance 22.6 21.8 21.5 20.7 20.3 19.4 
Hotels and restaurants 1.3 1.6 1.6 1.8 2.0 2.3 
Total social services 18.7 17.9 18.0 17.2 17.2 16.9 
Housing and real estate 1.9 1.9 2.1 3.9 3.8 3.6 
Government services (utilities)  0.4 0.4 0.4 9.9 10.2 10.2 
Government social services 16.2 15.5 15.4 3.4 3.2 3.2 
Share of employment  
Commodity sectors 51.4 51.4 .. .. .. .. 
Productive services sectors 16.1 16.2 .. .. .. .. 
Social services sectors 32.5 32.4 .. .. .. .. 
.. Not available. 
Source: Information provided by the Central Bank of Egypt. 
2. The share of agriculture in GDP  has been declining for near ly three decades, although the 
sector is still important for employment and gene rates about 15% of merchandise export earnings.  
Production of petroleum and natural gas accounts for under 12% of GDP a nd over 40% of Egypt's 
merchandise exports;  the contribution of manufact uring has oscillated around 19% in recent years.  
The services sector constitutes the backbone of the Egyptian economy in terms of GDP share, employment, and exports.  Besides merchandise expor ts, tourism and fees for using the Suez Canal 
are important generators of foreign exchange. WT/TPR/S/150/Rev.1 Trade Policy Review 
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3. The national currency is the Egyptian pound (LE).  Egypt currently has a managed floating 
system, with no pre-announced path for the excha nge rate.  The Central Bank of Egypt (CBE) is 
responsible for formulating monetary and excha nge rate policy, and for overseeing the banking 
system (Chapter IV(7)(ii)).1  Effective from 2 January 2005, Egypt  has accepted Article VIII, sections 
2, 3 and 4, of the IMF Agreement.   
4. Egypt's poverty headcount ratio is about 20%;  it declined considerably during the high-
growth years of the 1990s, but recent estimates suggest that those gains were eroded by the economic slowdown starting in 2000.
2  Life expectancy is some 69 years, and the adult literacy rate is about 
56%.  Against this background, poverty reduction and more equitable distribution of income are key 
policy objectives of the Government.  Egypt's rece ntly drafted Poverty Reduction Strategy Paper 
contains specific recommendations on ways to increase the earnings of the poor by:  (i) raising economic growth;  (ii) improving the quality and ava ilability of education;  and (iii) protecting the 
most vulnerable groups with appropriate social safety nets. 
5. Egypt continues to be an important recipi ent of official development assistance (ODA), 
although flows have decreased significantly in  recent years.  Net ODA flows amounted to 
US$894 million in 2003, down from US$2,200 million in  1996.  The main bilateral donors are the 
United States, Germany, and France. 
6. Remittances from Egyptians work ing abroad constitute an important source of foreign 
exchange and totalled US$3 billion in 2003/04.  The majority of transferred funds come from 
Egyptians working in the Middle East, mostly in the Gulf region, followed by the United States and 
the European Union.  
(2) R
ECENT ECONOMIC DEVELOPMENTS  
7. GDP growth, which ranged between  4% and 6% during the second half of the 1990s, declined 
steadily to 3.1% in 2002/03 (Table I.2).  Since then , a recovery has taken place, driven mainly by 
public consumption and net external demand (despite  a decline in aggregate investment), with a 
growth rate of 4.1% in 2003/04.  Nevertheless,  with annual population growth at about 2%, GDP 
growth rates are still rather low to have a signifi cant impact on poverty.  Unemployment has persisted 
at a relatively high level of 8% to 10%.  
8. The primary objective of the monetary policy is pr ice stability;  however, this has not yet been 
defined.  Open market operations are the CBE's main policy instrument.  The policy has helped to 
maintain inflation at low levels.  Measured by  the Consumer Price Index (CPI) for an urban 
commodity basket, the inflation rate fell from 3.8%  in 1998/99 to 2.4% in 2001/02, but increased to 
4.9% in 2003/04, mainly as a result of the devaluation of the pound.3   
 
                                                      
1 Pursuant to the Bank Law, the CBE enjoys formal independence in drafting monetary policies.  The 
Central Bank shall, however, set monetary policy targets in agreement with the Gove rnm ent.  To t his end, a 
Coordinating Council was established by Presidential D ecree 17/05.  The Board of  Directors is the CBE's 
highest decision-making authority;  it is chaired by a Governor who, together with two deputy governors, is 
designated by the President for a renewable period of four  years.  Three of the Board's fifteen members directly 
represent various ministries.  Governme nt officials are allowed to be memb ers of the Board of Directors.   
2 World Bank (2002). 
3 The authorities note that the Central Agency for Public Mobilization and Statistics is revising the 
methodology for calculating Egypt's CPI, taking into acc ount policy measures that affect consumer prices. Egypt WT/TPR/S/150/Rev.1 
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Table I.2  
Basic macroeconomic indicators, 1998/99 to 2003/04a 
(Year to year percentage cha nge, unless otherwise specified) 
    1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 
National accounts (annual percentage change in volume)        
Resources         
 Gross domestic product (at market prices) 6.1 5.4 3.5 3.2 3.1 4.1 
 Imports of goods and non-factor services  2.9 -3.4 -1.1 -6.0 1.3 17.2 
U s e s         
 Final consumption 4.4 4.9 4.1 2.7 2.4 2.7 
  Household consumption 4.6 5.1 4.0 2.4 2.2 2.7 
  Public consumption 2.6 2.8 4.9 5.0 3.2 3.1 
 Total capital formation 6.9 -1.4 -4.0 5.0 -4.3 5.7 
  Fixed capital  3.9 -2.3 -2.2 5.5 -5.9 6.6 
  Changes in stock 360.0 21.7 -42.9 -12.5 58.8 -14.8 
 Exports of commodities and non-factor services  9.1 3.8 3.3 -7.8 7.8 23.5 
External sector        
Current account balance (% GDP) -1.9 -1.2 0.0 0.7 2.4 4.4 
Net international reserves (in months of merchandise 
imports) 12.7 10.2 10.4 11.6 12.0 9.9 
Gross international reserves (in months of imports of goods 
and services) 9.8 7.7 7.6 8.3 8.8 7.4 
Gross external debt (US$ m illion) 28,224 27,783 26, 560 28,661 29,396 29,872 
Gross external debt (% of GDP) 31.2 28.2 28.5 33.7 42.5 37.1 
Nominal exchange rate (LE per US$ – period average) 3.4 3.4 3.7 4.3 5.0 6.2 
Real effective exchange rate (peri od average) .. .. -0.1 -13.1 -20.2 .. 
Financial indicators       
Money supply, M1 (annual percentage  change) 12.1 1.8 7.5 11.9 12.4 15.5 
Broad money, M2 (annual percentage  change) 11.4 8.8 11.6 15.4 16.9 13.2 
Interest rate (average of three-mont h treasury bills) 8.8 8.8 9.1 7. 6 8.5 8.8 
Inflation rate 3.8 2.8 2.4 2.4 3.2 4.9 
.. Not available. 
a Fiscal year starting on 1 July. 
Source: Information provided by the Central Bank of Egypt.  
9. The Egyptian pound was devalued three times in 2001,  after a decade of being strictly pegged 
to the U.S. dollar.  In January 2003, the Government adopted a floating system, with no 
pre-announced path for the exchange rate.  This was followed by a further depreciation of the pound, 
which has somewhat improved Egypt's external trad e account by contributing to the growth of its 
merchandise exports, and to  shrinking its imports.4  In March 2003, the Government introduced a 
surrender requirement that obliged exporters to sell 75% of their foreign currency proceeds to a state-
owned bank in Egypt;  this requirement was eliminat ed in 2004.  With the floating of the exchange 
rate in January 2003 and the introduction of an in ter-bank foreign exchange market in December 
2004, the informal market has prac tically disappeared.  The authoriti es also indicate that the practice 
of using a special exchange rate on impor ts of key foods is no longer in place. 
10. Total external debt stood at US$29.9 billion in 2 003/04, only slightly above the 1998/99 level.  
Most debt is long-term and concessional in na ture.  A debt sovereign Eurobond issue worth 
US$1.5 billion was successfully launched in two tranches (due dates 2006 and 2011 respectively) in 
June 2001.  This marked Egypt's first interna tional bond issuance and received strong demand (over 
                                                      
4 The U.S. dollar exchange rate is currently LE 5.81 (May 2005). WT/TPR/S/150/Rev.1 Trade Policy Review 
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US$3 billion) from large international institutions.  Bo th tranches were priced at significantly tighter 
spreads by regional comparison, reflecting a pos itive assessment of Egypt’s economic outlook by 
foreign investors.  
11. Egypt's fiscal deficit has fluctuated around  6% of GDP in recent years (Table I.3).5  A s  a  
result of persistent fiscal deficits, net domestic debt increased from 31.9% of GDP in 1999/00 to 
43.8% in 2002/03.  On the revenue side, growth ra tes have been high for income taxes and indirect 
taxes, although revenue from foreign trade (customs  duties and fees) has not increased significantly.  
On the expenditure side, growth rates were partic ularly high for wages and interest payments.   
Table I.3 
Fiscal operations, 1998/99 to 2003/04  
(LE million) 
 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04a 
Total revenues and grants 71,072 75,399 76,139 78,968 86,484 98,657 
 Total revenues 69,423 73,626 74,568 75,255 83,530 95,245 
  Current revenues 67,207 72,504 72,776 74,060 81,449 92,593 
   Tax revenues 46,543 49,621 51,358 51,726 57,486 64,793 
   Incomes taxes 16,740 20,104 21,235 21,625 23,189 26,903 
   Goods and services 18,584 20,085 20,793 20,580 22,782 25,757 
   International trade 11,048 9,295 9,184 9,323 11,354 11,970 
   Other 171 137 146 198 161 163 
  Non tax revenue 20,664 22,883 21,418 22,334 23,963 27,800 
  Capital revenues 2,216 1,122 1,792 1,195 2,081 2,652 
 Grants 1,649 1,773 1,571 3,713 2,954 3,412 
Total expenditure and net lending 79,995 88,600 96,121 101,153 111,913 125,639 
 Total expenditure 78,724 86,464 95,942 100,739 111,786 124,695 
  Current expenditure 61,183 69,758 80,843 85,472 95,226 106,957 
   Wages and salaries 19,562 22,180 25,217 28,238 31,549 35,950 
   Defence 8,107 8,516 9,731 10,218 11,215 12,400 
   Interest 16,406 18,597 20,907 22,903 26,849 30,706 
   Domestic 14,081 16,800 19,074 20,570 24,498 27,740 
   Foreign 2,325 1,797 1,833 2,333 2,351 2,966 
   Other 17,108 20,465 24,988 24,113 25,613 27,901 
 Capital expenditure 17,541 16,706 15,099 15,267 16,560 17,738 
 Lending minus repayments 1,271 2,136 179 414 127 944 
Overall deficit-/surplus+ -8,923 -13,201 -19,982 -22,185 -25,429 -26,982 
Percentage of GDP       
 Overall deficit-/surplus+ -2.9 -3.9 -5.6 -5.9 -6.1 -5.7 
 Total revenues and grants 23.1 22.2 21.2 20.9 20.7 20.8 
 Total expenditure and net le nding 26.0 26.1 26.8 26.7 26.8 26.5 
a November 2004. 
Source:  Information provided by the Egyptian authorities.  
12. Trade has played an important role in Egypt's economy, with exports of goods and services 
being a motor of the current economic recovery.  Th e combined share of exports and imports of goods 
and services in GDP increased from 43.1% in 1998/ 99 to 48.6% in 2003/04.  Egypt has pursued a 
policy of gradual trade liberalization, both on a unila teral basis and through its increasing participation 
                                                      
5 Fiscal policy formulation is under the responsibility  of the Ministries of Finance and of Planning.  Egypt WT/TPR/S/150/Rev.1 
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in regional trade agreements.  Despite the slowdown in growth, Egypt's current account has registered 
growing surpluses.  Its international reserves amounted  to US$18 billion in Marc h 2005, equivalent to 
9.7 months of merchandise and services imports. 
(3) DEVELOPMENTS IN TRADE AND INVESTMENT  
(i) Trade in goods and services 
13. Egypt's current account posted a deficit befo re 2000/01, but has posted growing surpluses 
since (Table I.4).  In 2003/04, the surplus amounted  to over US$3.4 billion, equivalent to 4.4% of 
GDP.  The switch of the current account into surp lus was mainly caused by a strong increase in 
merchandise export proceeds, which more than doubled and contributed to increasing the ratio of 
merchandise exports to imports from 26.1% to 57.2% between 1998/99 and 2003/04. 
Table I.4 
Balance of payments, 1998/99 to 2003/04  
(US$ million) 
  1998/99 1999/00 2000/01 2001/02 2002/03 2003/04b 
Balance of goods and services -6,593 -5,843 -3,776 -3,638 -1,666 -516 
 Goods (net) -12,563 -11,472 -9,363 -7,517 -6,615 -7,854 
  Exports proceedsa 4,445 6,388 7,078 7,121 8,205 10,453 
  Imports paymentsb -17,008 -17,860 -16,441 -14,637 -14,820 -18,786 
 Services (net) 5,970 5,630 5,588 3,878 4,949 7,318 
  Receipts 11,026 11, 426 11,696 9,618 10,441 12,981 
 Transport, of which: 2,637 2,635 2,704 2,715 2,965 3,755 
  Suez Canal dues 1,771 1,781 1,843 1,820 2,236 2,848 
 Travel 3,235 4,314 4,317 3,423 3,796 5,475 
 Investment income 1,933 1,833 1,850 938 641 485 
 Government services 308 110 190 188 253 179 
 Other 2,913 2,535 2,636 2,354 2,786 3,086 
  Payments 5,056 5,796 6,109 5,740 5,493 5,663 
 Transport 377 457 429 420 393 668 
 Travel 1,104 1,028 1,054 1,208 1,372 1,315 
 Investment income, of which: 928 901 778 842 749 692 
  Interest paid 789 770 728 689 626 586 
 Government expenditures 511 467 588 660 455 489 
 Other 2,136 2,943 3,260 2,609 2,524 2,499 
Transfers balance 4,869 4,680 3,742 4,252 3,609 3,934 
 Official (net) 1,097 932 769 1,144 664 888 
 Private (net), of which: 3,772 3,747 2,973 3,109 2,946 3,046 
  Remittances of Egyptians work ing abroad .. 3,067 2,843 2,953 2,963 3,000 
Current account balance -1 ,724 -1,163 - 33 614 1,943 3,418 
Capital and financial account 919 -1,199 -542 -964 -2,734 -5,016 
 Net direct investment in Egypt 711 1,656 509 428 701 407 
 Direct investment abroad -56 -43 -27 -15 -30 -156 
 Portfolio investment abroad -43 -12 -5 -3 -16 -11.3 
 Portfolio investment in Egypt (net), of which: -174 473 261 999 -405 -226 
  Bonds 0 0 0 954 -218 -148 
 Other investment (net) 481 -3,273 -1,280 -2,373 -2,983 -5,155 
  Net borrowing 191 492 268 -71 144 1,509 
  Other assets 143 -3,112 -2,281 -1,862 -3,068 -5,705 
  CBE -17 -22 -17 21 -32 -21 
  Banks 2,126 -198 1,034 227 -493 -2,593 
  Other -1,966 -2,891 -3,298 -2,110 -2,542 -3,090 
Table IV.4 (cont'd) WT/TPR/S/150/Rev.1 Trade Policy Review 
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  1998/99 1999/00 2000/01 2001/02 2002/03 2003/04b 
 Other liabilities 147 -654 734 -439 -59 -959 
  CBE -200 -3 495 7 4 -17 
  Banks 347 -651 238 -446 -63 -943 
Net errors and omissions -1,312 -664 -296 -107 1,337 1,440 
Overall balance -2,117 -3,027 -871 -456 546 -158 
Change in reserve asset (in crease -) 2,117 3,027 871 456 -546 158 
Merchandise exports/merch andise imports (%) 26.1 35.8 43.1 48.6 55.4 58.1 
Service receipts/service payments  (%) 218.1 197.1 191. 5 167.6 190.1 229.2 
Current receipts/current payments (%) .. 95.1 99.5 103.0 109.6 114.3 
Trade balance/GDP -15.1 -11.6 -9.5 -8.7 -8.1 -10.2 
Current account/GDP -2.1 -1.3 0.0 0.7 2.4 4.4 
Overall balance/GDP -2.5 -3.1 -0.9 -0.5 0.7 -0.2 
a Provisional. 
b Including free zone exports and imports. 
Source: Information provided by the Central Bank of Egypt;  and WTO Secretariat estimates.  
14. Egypt's main export goods are fuel products, which accounted for over 43% of exports in 
2003 (Chart I.1 and Table AI.1).  The share of petroleum products in Egypt's exports has shown 
strong fluctuations in recent years, mainly caused  by sharp price variations.  Agricultural products 
make up about 15% of merchandise e xports; cotton (about 6% of total exports) is the single most 
important agricultural export.  Manufactures account ed for over 30% of exports in 2003 (down from 
over 38% in 2000);  iron and steel, chemicals, and te xtiles are the most important subcategories.  The 
share of textiles in Egypt's merchandise exports h as declined gradually from 16.6% in 1995 to 4.5% 
in 2003.6   
15. Between 2000 and 2003, Egypt's imports fell by  over 22% (Chart I.1 and Table AI.2).  
Agricultural goods make up about 30% of mercha ndise imports, with maize and wheat being the 
single most important agricultural imports.  Manufactu res accounted for more than 48% of imports in 
2003 (down from over 55% in 2000);  the most import ant subcategories are machinery and transport 
equipment (19%) and chemicals (12%).  About 14 % of imports originated in Egyptian free trade 
zones and have not been classified by product category.   
16. Egypt's main trading partners are the United Stat es, Italy, Germany, and China (Chart I.2, and 
Tables AI.3 and AI.4).  The share of imports from Egyptian free zones into the customs territory has 
grown strongly, from 5% in 1999 to over 14% in 2003.  The Middle East accounts for about 5% of imports and 12% of exports.  The share of trade with African countries has increased strongly, following the gradual implementation of the COMESA  Agreement.  Exports to Sub-Saharan Africa 
increased from 1.4% in 1995 to 3.6% in 2003, while imports grew from 1.2% to 2.0% over the same 
period.  As the implementation periods for the ot her major regional agreements (Agadir Agreement, 
Greater Arab Free Trade Area, EU-Egypt Agreement) started only in 2004, these have not yet had an 
impact on the geographical distribution of Egypt's export and import shares. 
                                                     
 
6 The authorities emphasize that various efforts have been made to improve the data quality, most 
notably to reduce the relatively high share of  unclassified products (9.2% in 2002). Egypt WT/TPR/S/150/Rev.1 
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0%10%20%30%40%50%60%70%80%90%100%
1995 2000 2001 2002 2003
0%10%20%30%40%50%60%70%80%90%100%
1995 2000 2001 2002 2003Chart I.1
Structure of merchandise ex ports and imports, 1995-03
(a) Exports
(b) Imports
Source: WTO Secretariat calculations, based on UNSD, Comtrade database (SITC Rev.3 data).Iron and steel
Electrical machines Iron and steelFood Chemicals Transport equipment
Other semi-manufactures Agricultural raw material TextilesFood
Chemicals Cotton, not carded or combed
Other semi-manufactures FuelsTextiles
Non-electrical machinery Fuels OtherOtherClothing
 WT/TPR/S/150/Rev.1 Trade Policy Review 
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%19952000200120022003Chart I.2
Direction of merchandise trade, 1995-03
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%19952000200120022003(a) Exports
(b) Imports
Source: WTO Secretariat calculations, based on UNSD, Comtrade database.Saudi Arabia GermanyRussian Fed. Argentina
China ItalyOther EU(15) Brazil AfricaOther Asia NetherlandsIndia SpainUnited Sates Africa Other EU(15)
Saudi Arabia Italy Other
OtherUnited Sates France Japan
 Egypt WT/TPR/S/150/Rev.1 
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17. Egypt's services balance has traditionally posted  a strong surplus, which amounted to over 
US$7.3 billion in 2003/04 (Table I.4).  Its service rece ipts by far exceed those of merchandise exports.  
Tourism and dues for the Suez Canal together make up nearly two thirds of Egypt's service receipts;  
both increased strongly in 2003/04. 
(ii) Investment 
18. Since its last TPR in 1999, Egypt has remained  an important recipient of foreign direct 
investment (FDI);  inflows ranged between US$400 million and US$700 million (Table I.5).  The 
European Union has been the most important foreig n investor in Egypt (mainly due to large single 
acquisitions by Spanish, French, and Dutch co mpanies), followed by the United States.   
Table I.5 
Foreign direct investment, by country of origin, 1999/00 to 2003/04a 
(US$ million) 
 1999/00 2000/01 2001/02 2002/03 2003/04b 
Net foreign direct investment 1,656.1 509.4 428.2 700.6 407.2 
 Inflows 1,691.2 510.1 532.0 891.9 435.0 
  United States 459.7 196.2 159.0 277.5c 229.4 
  EU 757.7 25.2 363.2 584.4 42.5 
   Germany 25.6 0.1 17.5 27.0 10.9 
   France 62.4 129.4 208.1 61.4d 0.3 
   United Kingdom 178.7 0.0 12.3 28.0 16.9 
   Spain 3.6 0.0 83.8 177.5 0.0 
   Netherlands 0.0 0.0 0.0 288.6e 2.2 
   Portugal 486f 0.0 38.8 0.0 0.0 
  Arab countries 100.6 12.1 3.5 15.4 152.2 
   Saudi Arabia 4.7 2.2 0.9 3.7 4.0 
   United Arab Emirates 29.8 5.6 0.1 0.2 3.3 
   Kuwait 1.6 3.9 2.5 9.0 17.6 
   Oman 0.0 0.0 0.0 0.0 96.1 
   Bahrain 64.5 0.4 0.0 0.6 13.9 
   Lebanon 0.0 0.0 0.0 0.0 15.0 
  Other countries 373.2 24.5 6.3 14.6 10.9 
   Switzerland 22.8 5.8 2.0 4.0 5.3 
   Japan 0.0 0.0 0.0 2.0 0.5 
   Mexico 340g 0.0 0.0 0.0 0.0 
Outflows 35.1 0.7 103.8 191.3 27.8 
a Fiscal year starting on 1 June. 
b Provisional. c Represents the proceeds of selling Family Nutrition Co. 
d Includes the proceeds of selling a shar e of Gezira Hotels & Tourism Co. 
e Represents the proceeds of selling Al-Ahram Beverages Co. f Includes the proceeds of selling El-Amrya Cement Co. g Includes the proceeds of selling Assult Cement Co. 
Source:  Information provided by the Central Bank of Egypt. 
19. The privatization programme has significantl y increased the participation of foreign 
enterprises in sectors such as manufacturing and tour ism.  The authorities hope that the improvement 
in Egypt's business environment, as witnessed by the 2004 tariff cuts, the forthcoming tax reforms, 
and additional privatization, will lead to a fu rther increase of foreign investment in Egypt. WT/TPR/S/150/Rev.1 Trade Policy Review 
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20. Egypt's FDI outflows amounted to US$191 m illion in 2002/03, but fell to US$27.8 million 
the following year.   
(4) OUTLOOK  
21. In the absence of further macroeconomic refo rms, the growth of Egypt's economy is not 
expected to be significantly higher than in recent years, supported by, inter alia , the privatization 
programme, tariff cuts, and financial sector refo rm.  Addressing the large public deficit will be 
crucial, but requires a strong commitment to keepi ng fiscal expenditure under control.  Nevertheless, 
the measures taken to make the Central Bank more  independent in monetary policy formulation 
should contribute to keeping inflation low.  
22. Continued favourable conditions in internati onal oil and gas markets should favour Egypt's 
trade account, and thereby its current account.  Sustained earnings from the Suez Canal and 
remittances from Egyptians working abroad are also  expected to play their part.  Income from 
tourism, however, it not expected to continue its st rong growth in the light of recent security-related 
events.