One billion dollar increase in foreign investments
Egypt, Economics, 5/29/2000

Egypt's Prime Minister Atef Ebeid said that there has been an increase of about one billion dollars in foreign investments in Egypt in the past 8 months as a result of an increased interest on the part of major companies to invest in Egypt.

Ebeid said that there has been an increase of 400 per cent in the number of foreign companies which showed the interest in investing in Egypt during the past 8 months compared with the same period last year.

At a meeting Sunday with members of the German Industry and Trade Chamber, currently visiting Cairo, Ebeid said that increased interest in investing in Egypt was expected in the coming period in the fields of industry, construction and building, services, banks, oil and natural gas.

Ebeid said that the rate of liquidity on the market was gradually returning to normal. There are no government restrictions on the flow of liquidity. The government intends to support initiatives by banks, which were approved by the central bank of Egypt, to ensure an increase in liquidity by helping to increase market stability. Liquidity is increasing at an annual rate of 12,15 percent. This rate of increase is expected to continue next year. He added simultaneously that the volume of credit is increasing and, at the same time, banks are gaining in strength than before. The policy of extending loans is expected to continue in a more rational way by using former experience to ensure the safety of local and foreign deposits.

The Prime Minister is "deeply optimistic" about the future of Egyptian economy in the coming period in the light of indicators of growth, inflation, budget deficit and balance of payments deficit according to estimates of a mission of the International Monetary Fund(IMF) which visited Cairo last month.

The balance of payments will witness a big improvement in the coming months after Egypt under pressures in the past period as a result of a drop in its revenues from oil, tourism and the Suez canal.

However, he said Egypt's income from tourism this year reached its best rate in the past ten years. There has been an increase in the number of tourists and the tourism revenue.

Prime Minister Atef Ebeid expected an increase in revenues from oil of more than one billion dollars annually after it had dropped to 100 million dollars in 1999. The anticipated increase will result from an increase in oil prices and big discoveries of oil and natural gas, particularly in the western desert. Natural gas reserves have reached 100 trillion cubic feet. He said that the mission of the International Monetary Fund(IMF) expected the rate of real growth in Egypt to reach between 5.5 and 6 per cent in 2001. This is extremely good compared to the international rate of 3,4 per cent.

The prime minister expected the rate of inflation to continue to drop to 3,2 per cent next year as a result of a strict financial system adopted by the government.

Previous Stories:
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