| Egypt is on a roll. Strong macro-economic indicators include inflation at 5.4% for 1996 and a current account deficit of just 0.8% of GDP, which some analysts expect may even go into surplus this year, while the overall budget deficit stands at 1.1% of GDP. Foreign currency reserves of over $19 billion represent up to 18 months' import cover. According to one analyst, per capita income has risen 25% in the past two years to E£1,100 ($320). The agreement on the final $4 billion of the Paris Club rescheduling package, which is part of a continuing economic reform programme, brought IMF approval, which in turn paved the way for a rating. Since the Gulf War, Egypt has benefited from debt forgiveness, totalling $24 billion. Standard & Poor's has now rated both Egyptian foreign and domestic debt at investment grade. The IFC is promoting Egypt to its composite investable index, while indirect foreign investment accounts for as much as a third of the Cairo stock exchange turnover. Foreign interest is expected to increase as the government finally embarks upon the sale of majority shares in state companies, after years of indecision and selling only minority stakes. |