More direct foreign investments into Egypt
Egypt, Economics, 5/2/2001

A recent report by the US Merrill Lynch Financial Institution said that the deficit in the balance of payments in Egypt was substantially reduced to $ 1.3 billion last year compared to $ 4 billion in 1999.

The report indicated that this positive development was a result of the structural reform pursued by the Egyptian government, besides other financial and monetary policies especially the new exchange rate system that is estimated to dispel apprehensions about weakness of capital dealings.

The report indicated that the trade balance deficit had also dropped down to $ 2.4 billion over the second quarter of the fiscal year 2000/2001, at a reduction rate of 14 per cent as compared to the same period in the previous year.

The study attributed this to the increase in the Egyptian exports by 23.5 per cent and the slight increase in imports by 2.5 per cent.

The Merrill Lynch report showed that this decrease in the trade balance deficit represented 1.2 per cent of the Gross Domestic Product (GDP) in the year 1999/2000, compared to 1.9 per cent in the previous year.

The report indicated that the stability of the Egyptian pound against the US dollar at LE 3.85 per dollar would help maintain the increase of Egypt's non-petroleum exports during the first half of the current year.

The report further noted that the measures introduced by the government for liberalizing the power and telecommunications sectors would attract more direct foreign investments into the country.

These investments are estimated to range from $ 3-5 billion over the coming five years, said the report.

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