Economic growth had been sustained at a rate above 7% in the last 2 years from a base of 3.1% in FY 02/03.
Real GDP growth in Egypt reached 7.2% in FY 07/08 up from 7.1% in the previous year, however due to the financial crisis Egypt has witnessed a drop in real GDP growth.
The impact of the U.S. financial crisis yet remains mild compared to the rest of the world, as the GOE is still able to maintain a growth rate of 4.7% FY 2008/2009.
The relative stability of the economic environment in Egypt is mainly attributed to the recent economic and financial reforms that had been introduced during the year 2003/2004.

 

Net International Reserves reached US $ 31208.4 mn at the end of May 2009.  

                                                      

                                                                                                            Source: Central Bank of Egypt

          

 

Fiscal Reform
• Tax Reform: Corporate tax rates were cut from 42% to 20%. Personal tax rate was cut from 32% to 20%. New administration practices were introduced.
• Customs reform: weighted average tariff rate was reduced from 14% to 6.9%. Tariff bands were streamlined and the number of tariff categories was reduced from 27 to 6, while reducing the number of articles covered under the Customs Act by more than half.

Financial Services
• An Emphasized role of Egypt’s Central Bank and a more consolidated banking sector. The Central Bank of Egypt has created a sounder and more efficient banking system by hiking capital adequacy regulations, encouraging mergers and acquisitions, developing its regulatory and supervisory apparatus and addressing the legacy of non-performing loans. Privatization has also gained momentum; the fourth largest state bank was privatized
• A further penetration of non-bank financial products: mortgage finance, financial leasing, fixed income products, factoring, and insurance
• A Strengthened Capital Market Authority with maturing stock exchange. Introduction of small cap stock exchange “Nilex”

Legal & Business Reform
• Liberalized legal framework guaranteed by Investment Law including: 100% foreign ownership of companies-profit and dividend repatriation-dispute resolution and settlement mechanisms.
• Introduction of enabling legislations: Introduction of comprehensive Corporate Governance Principles, Anti-Trust and Consumer Protection Laws, Anti-Money Laundry.
• Cost and time of business entry was reduced. Incorporation time was cut from several months to 72 hours. Minimum capital required for LLC was reduced to LE 200.
• A Corporate One-Stop Shop was introduced at multiple locations throughout the country.
• The regulatory and institutional frameworks governing investment in Egypt have taken bold steps in the past years to slash red tape and make one of the world’s oldest economies is also one of the easiest in which to do business. Launch of fast-track dispute resolution services for all investors, protection of property rights and entrenching the principle of non-discrimination as the core principles of investment policy in Egypt.

                                                                                                                               Source: Central Bank of Egypt