Egypt

Under the regime of Anwar el-SADAT, Egypt signed the Egypt-Israel peace treaty in 1979, under which the Sinai was returned to Egypt. Egypt’s participation to the 1978 Camp David Accords, the peace treaty with Israel, and Sadat’s 1977 visit to Israel, drove it out of the Arab League from 1979 to 1989. In power since 1981, Hosni Mubarak is still the President. In terms of the Arab world, Egypt has the second largest economy, following Saudi Arabia. The growing population, the limited arable land, and reliance on the Nile River strain Egypt. Also, economic reforms have been pursued as well as investments in communications and physical infrastructure in order to improve the economy.

Main Airports

Borg El Arab (HBE), Cairo International (CAI), Luxor Airport (LXR)

U.S. Embassy

8 Kamal ElDin Salah St., Garden City, Cairo, Egypt
tel: [20] [2] 797-3300

Statistics

GDP: purchasing power parity:

$303.5 billion (2005 est.)

GDP - real growth rate:

4.9% (2005 est.)

GDP - per capita: purchasing power parity:

3,900 (2005 est.)

Inflation rate (consumer prices):

4.9% (2005 est.)

Labor force:

21.34 million (2005 est.)

Exports:

$14.33 billion f.o.b. (2005 est.)

Exports - partners:

US 13.6%, Italy 9.6%, Spain 7.8%, Syria 5.8%, Germany 5%, France 5%, UK 4.2% (2005)

Imports:

$24.1 billion f.o.b. (2005 est.)

Imports - partners:

US 10.7%, Germany 7.1%, China 6.5%, France 6.4%, Italy 5.8%, Saudi Arabia 4.8% (2005)

Population:

78,887,007 (July 2006 est.)

Population growth rate:

1.75% (2006 est.)

Population Below Poverty Line:

20% (2005 est.)

Major Industries:

textiles, food processing, tourism, chemicals, pharmaceuticals, hydrocarbons, construction, cement, metals, light manufactures

Employing Workers: 144*

Registering Property: 141*

Enforcing Contracts: 157*

Closing a Business: 120*

*2006 World Bank rank out of 175 countries

Starting a Business

The table below shows the number of steps and the amount of time needed to start a business, on average

Indicator	Egypt	Region
Procedures (number)	10	10.3
Time (days)	19	40.9

Egypt Risk Assessment

Country Rating

Rating: B

Political and economic uncertainties and an occasionally difficult business environment can affect corporate payment behaviour. Corporate default probability is appreciable.

Risk Assessment

The economy grew strongly in 2007 driven by domestic demand. The government's liberal approach since 2004 has fostered a climate of confidence conducive to consumption and investment. The economy has also benefited from oil country boom via their investments and emigrant worker remittances. In this context, the business environment is improving with the Coface payment incident index remaining below the world average. While the gas sector has continued to develop, manufacturing, construction, tourism, and communications have achieved excellent performance. The outlook for 2008 is bright with growth likely to reach between 7.0 and 7.5 per cent.

The external financial situation remains healthy amid the good trend on foreign currency earnings and the increase in foreign direct investment fuelled by the privatisations. Debt service is low and Egypt is building up foreign exchange reserves. However, the fiscal deficit and public sector debt remain a source of concern. Controlling public spending and reducing the debt necessitates a spending overhaul that will take time. Regional conflicts and poverty have strengthened Islamist opposition movements. In this context social climate is tense and officials have exercised caution in pursuing reforms.

STRENGTHS

• The business climate has benefited from an active reform programme and a regional economic boom.
• Egypt boasts diversified sources of foreign exchange (the Suez Canal, tourism, private transfers, and oil and gas exports).
• Foreign exchange reserves are high.
• The country enjoys the political and financial support of Western countries.

• The interest on public debt and the cost of subsidies weighs on public finances limiting the capacity for infrastructure development.
• The banking system is not yet capable of meeting the economy's needs.
• The tourism sector, whose revenues are of fundamental importance to the current account balance and economic growth, remains vulnerable to the terrorist menace

• Agriculture
• Apparel
• Arts & Crafts
• Automobile
• Bags, Cases & Boxes
• Chemicals
• Computer Hardware & Software
• Construction & Real Estate
• Consumer Electronics
• Electrical & Electronics
• Energy & Environment
• Food & Beverage
• Furniture & Furnishing
• Health & Medicine
• Home Supplies
• Industrial Supplies
• Lights & Lighting
• Machinery
• Mineral & Materials
• Office Supplies
• Security & Protection
• Service
• Sports & Entertainment
• Telecommunications
• Textile
• Toys
• Transportation