In the 1990's, the Government of Egypt launched an Economic Reform Program, which was designed to be carried out in several phases. The first one had focused on stabilizing the economy, improving public finance and exchange rate policies and stabilizing inflation. The second phase targeted the trade and investment issues,  private sector reform and banking sector restructuring. These reforms have been achieved through policy changes and through educational and other measures aiming at the improvement of economic and social welfare.

Macroeconomic outlook and key economic trends

Economic reform program:

Egypt's economic performance and reform program in the 1990s gained the appreciation of  international observers due to the increase of the growth, the reduction of inflation and the budget deficit. Egypt has a well-diversified economy, with no single sector participating more than 21%  GDP. Such a solid economic base has reduced the negative effect of the external shocks in 1997-98: terrorist attacks, oil price collapse, Southeast Asian economic crisis, and in 2001 (September 11).

Private investments exceeded 80% of total investments in Egypt during 1999, reflecting the government's keenness  to facilitate private sector participation. Public private partnership is one of the most important priorities of the new government, as the government encourages the private sector to invest in non-traditional areas especially in financial services and infrastructure.

Privatization: Egypt started its public enterprise reform program in 1991 with the launch of Law 203 for the year 1991. The program included several areas of reform mainly the sale of public assets and shares, as well as the restructuring of companies as long as they remain with the state, comprising technical, financial and labor restructuring. The results of implementing the program so far yielded as of July 2005 more than LE 26 billion in revenues from total and partial sales through 247 transactions, besides the optional early retirement of more than 205,000 workers, and the comprehensive debt settlement agreement currently being finalized between the Ministry of Investment, Ministry of Finance and creditor banks for the debt owed by remaining companies (under law 203) amounting to LE 36 billion (as of 2004). The attraction from countries all over the world contributed positively to the flow of FDI to the country through the asset management program, apart from other positive effects like stimulating the stock market.

Economic and Financial Indicators