CENTRAL BANK OF EGYPT

ECONOMIC REVIEW

Vol. 49 No. 2

2008/2009

Research, Development and Publishing Sector

The Economic Review is issued by the Research, Development and Publishing Sector at the Central Bank of Egypt (CBE) on a quarterly basis. It aims to make available to a broad readership of specialists and non-specialists a wide range of information on the performance of the Egyptian economy during the reporting period. The CBE posts the Review on its website: www.cbe.org.eg.

Contents

Main Macroeconomic Indicators 1- Development and Growth 1

1/1 Gross Domestic Product (GDP) ……………………………………. 1 1/2 Employment and Unemployment…………………………………... 5 1/3-Inflation……………………………………………………………... 6

2- Monetary and Banking Developments 14 2/1 - Monetary Policy and Monetary Aggregates…………………………. 14 2/1/1- Monetary Policy……………………………………………………… 14 2/1/2- Reserve Money……………………………………………………… 16 2/1/3- Banknote Issue………………………………………………………. 17 2/1/4- Domestic Liquidity (M2) and Counterpart Assets…………………… 18 2/1/5- Payment Systems and Information Technology (IT) ……………….. 23 2/1/6- SWIFT Local Services and Clearing Houses Activity……………… 25 2/2 - Banking and Credit Developments …………………………………. 26 2/2/1- Banking Sector Reform…………………………………………….. 26 2/2/2- Overview of Banks’ Aggregate Financial Position…………………. 27 2/2/3- Interbank Money Market in Egypt…………………………………. 31 2/2/4- Deposits……………………………………………………………... 31 2/2/5- Lending Activity …………………………………………………… 34 3- Stock Exchange 37

3/1 - Shares Market………………………………………………………. 40 3/1/1- Primary (Issue) Market …………………………………………….. 40 3/1/2- Secondary (Trading) Market ……………………………………….. 41 3/2 - Bonds Market……………………………………………………….. 43 3/2/1- Primary (Issue) Market……………………………………………… 43 3/2/2- Secondary (Trading) Market……………………………………….. 43 3/3 - Mutual Funds ……………………………………………………….. 44 4 - Public Finance and Domestic Public Debt 45 4/1 - Consolidated Fiscal Operations of the General Government………... 45 4/2 - Domestic Public Debt ………………………………………………. 52 4/2/1- Debt of the Government (Net)……………………………………….. 52 4/2/2- Debt of Public Economic Authorities……………………………..... 54 4/2/3- Resources and Uses of the National Investment Bank (NIB)…. …... 54

5 - External Transactions 56 5/1 - Foreign Exchange Market……………………………………………... 56 5/2 - Balance of Payments………………………………………………. ..... 58 5/2/1- Trade Balance………………………………………………………….. 58 5/2/1/1-Commodity Structure of Exports and Imports……………………. ….. 59 5/2/1/2-Geographical Distribution of Export Proceeds and Import Payments.... 63 5/2/2 - Services Balance and Transfers……………………………………… 64 5/2/3 - Capital and Financial Account………………………………………… 67 5/3 - International Finance …………………………………………………... 70 5/3/1- FDI in Egypt…………………………………… 71 5/3/2- External Official Grants ………………………………………………. 74 5/3/3- External Debt …………………………………………………………. 76 Annex - Statistical Section ………………………………………………………… 81

Main Macroeconomic Indicators

July/Dec. Growth Rate 2007/2008 2008/2009

- GDP Growth Rate at Factor Cost % 7.1 5.0 - GDP Growth Rate at Market Price % 7.0 5.0

Price Index - Change Rate of CPI (Urban) (Jan. 2007=100) % 5.1 3.5 - Change Rate of PPI (2004/2005=100) % 8.9 -18.8

(LE bn) July/Dec. July/Dec. 2007/2008 2008/2009Monetary Survey End of the Period

Domestic Liquidity (M2) 716.3 791.4 Growth Rate (M2) (%) 8.1 3.2 Reserve Money 140.8 167.9 Growth Rate (%) 5.0 (1.2) Money Supply (M1) 151.8 174.5 Growth Rate (M1) (%) 15.6 2.3 Currency in Circulation/Money Supply (%) 63.7 65.4 Banking System Foreign Assets, of which: 321.0 278.8 CBE Foreign Assets 172.7 185.8

Banking System Foreign Liabilities, of which: 88.4 30.3 CBE Foreign Liabilities 65.5 1.4

Total Deposits with Banks (Excl. CBE) 700.8 767.7 In Local Currency 508.1 565.4 In Foreign Currencies 192.7 202.3 Foreign Currency Deposits/Total Deposits (%) 27.5 26.4

Total Lending and Discount Balances Extended by Banks (Excl. CBE), of which: 381.8 429.2 To Government and Public Economic Authorities 32.0 31.7 To Business Sectors (Public and Private) 273.1 301.3 Portfolio of Securities and TBs with Banks (Excl. CBE), of which: 183.2 268.7 TBs and Government Bonds 131.1 220.0 Loans/Deposits with Banks (%) 54.5 55.9 Investment in Securities, TBs and Equity Participations/ Deposits (%) 26.1 35.0

July/Dec. July/Dec. 2007/2008 2008/2009Annual Discount and Interest Rates (%)

End of the Period CBE Lending and Discount Rate 9.00 11.50 CBE Overnight Deposit and Lending Rates Deposit 8.75 11.50 Lending 10.75 13.50 Interest Rate on Less than 3-Month Deposits 6.00 7.40 Interest Rate on One Year or Less Loans 12.20 12.50

Overall Deficit or (Surplus) 69.8 36.0

Total Finance 69.8 36.0 - Domestic Finance 77.9 50.2 Banking 67.4 49.2 Non-Banking 10.5 1.0 - Foreign Borrowing -6.9 23.6 - Arrears -1.0 - - Others -1.2 -7.5 - Revaluation Differences - 1.8 - Net Privatization Proceeds 1.0 0.1 - Difference between treasury bills face value & present value - -7.4 - Discrepancy - -18.2 - Unclassified - -6.6 - Cash or (Surplus) Defici t/ GDP (%) 6.7 3.3 - Overall Deficit / GDP (%) 6.9 3.3 - Expenditure / GDP (%) 34.1 14.9 - Revenues / GDP (%) 27.5 11.6

US Dollar Exchange Rate Announced by the CBE

(PT Per US Dollar)

- Buy and Sell Exchange Rates (Average of the Period) 559.1 545.2 - End of the Period (Buy Rate) 550.4 550.4

2008/2009 Estimates for the FY

Actual July/Dec.

Consolidated Fiscal Operations of the General Government (Budget Sector)

LE bn - Total Revenues 276.8 127.7 - Total Expenditures 343.9 163.5 Cash Deficit (Surplus) 67.1 35.8 Net Acquisition of Financial Assets 2.7 0.2

Domestic Public Debt End of June 2008

End of Dec. 2008

- Domestic Government Debt 478.8 528.9 - Debt of Public Economic Authorities 50.1 55.6 - Debt of NIB 137.9 138.2

US$ bn

July/Dec. Balance of Payments

2007/2008 2008/2009Current Account & Transfers (0.3) (2.5) Trade Balance (11.3) (14.6) Merchandise Exports 13.1 13.6

Oil and its Products % 46.0 44.0 Others % 54.0 56.0 Merchandise Imports 24.4 28.2 Intermediate Goods % 26.9 32.4 Investment Goods % 23.1 23.9

Consumer Goods % 16.4 17.0 Fuel, Raw Materials and Others % 33.6 26.7

Services Balance 6.8 7.5 Receipts, of which: 12.8 13.6

Transportation % 28.6 31.4 Travel % 43.6 42.3

Investment Income % 13.1 10.7 Payments, of which: 6.0 6.1

Transportation % 13.8 15.2 Travel % 24.8 24.9 Investment Income % 15.8 11.8

Transfers 4.2 4.6 Official % 4.9 10.9 Private % 95.1 89.1 Capital and Financial Account 3.2 2.0 Overall Surplus/(Deficit) 3.1 (0.5) External Debt at End of Dec. 32.8 32.1

- 1 -

1: Development and Growth 1/1: Gross Domestic Product (GDP)

According to the Ministry of Economic Development, Egypt's

economic growth, hit by the repercussions of the global financial crisis during Oct./ Dec. 2008/2009, slowed down during July/Dec. 2008/2009 as compared with the corresponding period of the previous FY. Real GDP growth rate at factor cost fell to 5.0 percent during the period under review from 7.1 percent during July/Dec. 2007/2008, reaching about LE 396.7 billion. Despite the sluggish growth, it exceeded its counterpart in the emerging economies. As such, the average growth rate during the first and second quarters of 2008/2009 were 5.0 percent in Egypt while it was 3.7 percent in the emerging economies.

Sources: Ministry of Economic Development JP Morgan, world Financial Markets, 2009

On the supply side, the fall in real GDP growth rate at factor cost

during the reporting period was ascribed to the decline in real growth rate of some major economic sectors, especially tourism, manufacturing, and Suez Canal. However, the decline was somehow offset by the high contribution of the sector of oil, gas and other extractions. Of the overall GDP growth rate, the commodity sectors contributed 2.7 percentage points, productive services sectors 1.9 percentage points, and social services 0.4 percentage point. The commodity sectors were led by the sector of oil, gas and other extractions (0.9 percentage point), followed by

Egypt’s Real GDP Growth Rate vs Emerging Markets

1.52.53.54.55.56.57.58.5

July/D

ec 20

07/20

08

Oct/Dec

2007

/2008

Jan/M

ar 20

07/20

08

April/J

une 2

007/20

08

July/S

ep 20

08/20

09

July/D

ec 20

08/20

09

Egypt Emerging Markets & Developing Countries

%

- 2 -

manufacturing (0.7 percentage point) and agriculture and irrigation (0.5 percentage point). As for the productive services sectors, the main contributors to the overall GDP growth were wholesale & retail trade (0.6 percentage point) and communications (0.5 percentage point).

As for the contribution of the public and private sectors to overall

GDP growth rate, the private sector constituted almost two-thirds of the growth rate.

Share of Private Sector in GDP Growth Rate By SectorJuly/Dec 2008/2009( Percentage Point)

Wholesale&

Retail Trade 0.6Construction

&Building

0.4

Manufacturing 0.6

Extractions 0.2

Communications 0.4

Agriculture & Irrigation

0.5

Transportation&

Storage 0.2

Others 0.3

Share of Public Sector in GDP Growth Rate By SectorJuly/Dec 2008/2009

Financial Intermediaries

0.1Others

0.4

Electricity 0.1

Communications 0.2

Suez Canal 0.1

Insurance and Social Solidarity

0.2

Extractions 0.7

(Percentage Point)

- 3 - On the demand side, real GDP growth rate at market prices

slackened to 5.0 percent during the period under review against 7.0 percent during the period of comparison. This was ascribed to the low contribution of total investments and the negative contribution of net exports of goods and services (exports of goods and services less imports of goods and services) to GDP growth. Yet, the decline in economic growth rate was offset by the rise in public and private consumption.

The share of total investments in GDP growth rate dramatically

dropped to 0.7 percentage point during the reporting period from 5.7 points during the comparison period. The decrease was attributed to the fall in the real growth rate of total investments to 2.3 percent against 16.8 percent. This was partly due to the continuous decline in foreign direct investments (FDI) in green field investments or capital increases. Still, the private sector continued to provide the largest share in the development process. Its share in total investments reached 69 percent and its contribution to GDP exceeded 60 percent. To invigorate growth, the government also intended to pump new investments in the market to stimulate domestic demand and mitigate the negative repercussions of the global financial crisis.

Shares of Consumption and Net ExternalDemand in Real GDP Growth Rate (percentage point)

July/Dec. 2008/2009

5.0

0.7

5.6 5.7

-4.3

-0.7

-6-4-202468

July/Dec2007/2008

July/Dec2008/2009

Consumption Investment Net Exports

- 4 - Net external demand (exports of goods and services less imports

thereof) contributed 0.7 percentage point to the decline in overall GDP growth.

On the other hand, private consumption (representing 76 percent of GDP) contributed 4.5 percentage points to the real GDP growth during the period under review. The share of the public consumption in GDP rose from 0.1 percentage point to 0.5 percentage point.

Share of Demand Components in Real GDP Growth Rate

(Percentage point) July/Dec. 2007/2008 2008/2009

Real GDP Growth Rate 7.0 5.0 1-Domestic Demand(a+b) 11.3 5.7 a- Final Consumption: 5.6 5.0 Private 5.5 4.5 Public 0.1 0.5 b- Capital Formation 5.7 0.7 2- Net External Demand (a-b) -4.3 -0.7 a- Exports of goods and services 6.0 -0.5 b- Imports of goods and services 10.3 0.2

A breakdown of total implemented investments by economic sector reveals that oil, gas and other extractions accounted for 23.9 percent, manufacturing 20 percent, electricity and water 9.3 percent, agriculture and irrigation 3.5 percent, construction and building 1.9 percent, productive services 20.8 percent, and other services 20.6 percent.

Business Sectors’ Investments by SectorJuly/Dec 2008/2009

0.0

5000.0

10000.0

15000.0

20000.0

25000.0

Man

ufac

turin

g&

Oil

prod

ucts

Tra

nspo

rtat

ion,

C

omm

unic

atio

nsan

d St

orag

e

Elec

tric

ity &

wat

er

Rea

l Est

ate

Dra

inag

e

A

gric

ultu

re,

Irr

igat

ion

& R

ecla

mat

ion

Educ

atio

nal

Serv

ices

Res

taur

ants

&H

otel

s

Oth

ers

Private Public

LE Million

- 5 - 1/2: Employment and Unemployment

During Oct./Dec. 2008/2009, the number of new job opportunities

declined to 159 thousand (including 31 thousand job opportunities abroad), against 180 thousand job opportunities (including 33 thousand job opportunities abroad) during July/Sept. of the same year. Such a decline was accompanied by a rise in unemployment rate to 8.8 percent in the second quarter of FY 2008/2009 from 8.6 percent in the previous quarter.

Employment by economic sectors ran during Oct./Dec. of 2008/2009 as follows: around 55.0 percent in merchandise sectors, 23.0 percent in social services and 22.0 percent in productive services.

Source: CAPMAS

Employment by SectorOct./Dec. 2008

Commodity Sectors

55%

Social Services Sectors

23%

Productive Services Sectors

22%

Employment by SectorJuly/Sept. 2008

Productive Services Sectors

22%

Social Services Sectors

21%

Commodity Sectors

57%

- 6 - 1/3: Inflation

First: Consumer Price Index (CPI)

CPI Inflation (urban) declined to 3.5 percent during July/Dec. 2008/2009 from 5.1 percent during the comparison period. Accordingly, the annual inflation rate dropped from 20.2 percent in June 2008 to 18.3 percent in Dec. 2008. This was mainly ascribed to the marked drop in domestic food prices on the back of a sharp decline in the world prices of primary commodities as of August 2008. However, this has not been fully reflected on domestic price levels due to the downward price rigidities in domestic market.

Source: CAPMAS The decline in inflation was also attributed to the slowdown in

domestic economy, hit by the repercussions of the global financial crisis. Accordingly, inflationary pressures associated with high growth rates in the previous periods started to level off. In addition, a number of decisions were issued to increase the supply of some foodstuffs (e.g. the temporary ban on rice exports) to lower their prices.

The contribution of CPI groups (urban) to the annual inflation rate at end of Dec. 2008, and to the headline inflation rate during July/Dec. 2008/2009 is shown in the following table:

CPI and price Index of Food and non-Alcoholic Beverages (Urban)

100105110115120125130135140145

Dec20

07 Jan

Feb.

March

April

MayJu

ne July

Aug.

Sep.

Oct.Nov

.

Dec.20

08

All Items Food and non -Alcoholic Beverages

- 7 -

The Share of CPI Groups (Urban)

in A- Headline Inflation (Dec./Dec.) (Jan. 2007= 100)

Weights Inflation Rate

During the Year Ending Dec. (%)

Share in Headline Inflation During the

Year Ending Dec. (percentage point)

Main CPI Groups

2007 2008 2007 2008 General Index 100.0 6.9 18.3 6.9 18.3 Food & non-alcoholic beverages 43.9 8.6 21.9 3.8 9.8 Alcoholic beverages, tobacco and narcotics 2.5 0.0 21.0 0.0 0.5 Clothing and footwear 7.9 5.1 13.3 0.4 1.0 Housing, water, electricity, gas & fuel 13.5 2.4 9.2 0.3 1.2 Furnishings, household equipment and routine maintenance of the house 4.2 6.0 17.2 0.2 0.7 Health care 3.6 1.8 12.1 0.1 0.4 Transportation 5.2 0.5 22.6 0.0 1.1 Communications 3.6 0.0 9.5 0.0 0.3 Culture & recreation 3.4 3.1 29.3 0.1 1.0 Education 4.4 37.8 4.6 1.7 0.3 Restaurants & hotels 3.6 2.5 50.6 0.1 1.7 Miscellaneous goods & services 4.2 4.4 7.2 0.2 0.3

- 8 -

B- During July/Dec. (Jan. 2007=100)

Inflation Rate July/Dec. (%)

Share in Headline Inflation July/Dec.(percentage point) Main CPI Groups

2007/08 2008/09 2007/08 2008/09 General Index 5.1 3.5 5.1 3.5 Food & non-alcoholic beverages 6.1 1.8 2.7 0.8 Alcoholic beverages, tobacco and narcotics 0.0 7.9 0.0 0.2 Clothing and footwear 1.0 10.0 0.1 0.7 Housing, water, electricity, gas & fuel 1.4 2.9 0.2 0.4 Furnishings, household equipment and routine maintenance of the house 2.7 9.1 0.1 0.4 Health care 0.0 0.0 0.0 0.0 Transportation 0.5 2.6 0.0 0.1 Communications 0.0 5.3 0.0 0.2 Culture & recreation 3.1 9.5 0.1 0.3 Education 37.8 4.6 1.6 0.2 Restaurants & hotels 2.5 5.7 0.1 0.2 Miscellaneous goods & services 4.2 0.4 0.2 0.0

As illustrated above, the share of food & non-alcoholic beverages

in the headline inflation, during July/Dec. 2008/2009, was only 0.8 percentage point against 2.7 percentage points during the corresponding period of the previous FY. This was ascribed mainly to the weak contribution of bread and cereals (-0.4 percentage point against 0.6 percentage point), vegetables (-0.1 point against 0.2 point), oils and fats (-0.1 point against 0.6 point), and milk, cheese & eggs (0.7 point against 0.9 point). In addition, the food & non-alcoholic beverages index notably declined during the period under review to only 1.8 percent from 6.1 percent during the corresponding period of the previous FY.

- 9 -

Moreover, the share of education in headline inflation decreased

during the period under review to 0.2 percentage point (against 1.6 percentage points during the corresponding period of the preceding FY). This was ascribed to the deceleration in the inflation rate of this group from 37.8 percent during the period of comparison to 4.6 percent during the period under review.

Source : IFS, IMF (various issues)

Contribution of main Food's items to Headline Inflation (July/Dec.2008/2009) (Percentage Point)

-0.6-0.4-0.20.00.20.40.60.8

Meat

Fish an

d sea

food

Milk , c

hees

e and

eggs

Oils an

d fats Frui

t

Vegeta

bles

Bread a

nd ce

reals

The Change in International Prices of Basic Foodstuffs

-80.0-60.0-40.0-20.0

0.020.040.060.080.0

July/Dec.2007/2008 65.3 18.0 9.5 15.9

July/Dec.2008/2009 -36.8 -59.8 -44.9 -34.0

Wheat Palm Oil Maize Rice

(%)

- 10 -

As for other main groups that contributed to the headline inflation during July/Dec. 2008/2009, clothing and footwear came first with a share of 0.7 percentage point, followed by three other groups namely, housing, water, electricity, gas & fuel; furnishings, household equipment and routine house maintenance; and culture and recreation (0.3 percentage point each).

According to the CPI (urban), the monthly inflation rate exhibited a downward trend as of Sept. 2008 posting a negative 0.1 percent during Oct. and Nov. 2008, and a negative 1.3 percent during Dec. 2008. However, it rose again during Jan. and Feb. 2009, to record a positive 0.5 percent and 1.1 percent, respectively.

The decline in the monthly inflation rate in Dec. 2008 as compared

with the preceding month was ascribed to the negative contribution (1.3 percentage points) of food & non- alcoholic beverages, mainly vegetables (0.9 percentage point); oils & fats; milk, cheese & eggs; and meat (0.1 percentage point each).

As for inflation outlook, the annual inflation is expected to

continue its downtrend due to the adverse implications of the global financial crisis for Egypt’s economic growth, and the decline in world primary commodity prices.

CPI Monthly Inflation rate, 2008

-2

-1

0

1

2

3

4

5

Dec20

07 Jan

Feb.

March

AprilMay

June

July

Aug.Sep

.Oct.

Nov.

Dec.20

08

%

- 11 - Second: Producer Price Index (PPI)

Annual PPI inflation rate retreated to a negative 0.3 percent at end of Dec. 2008 against a positive 10.6 percent at end of Dec. 2007. The decline was mainly in July/Dec. 2008/2009, as it reversed to a negative 18.8 percent from a positive 8.9 percent during the corresponding period of the previous FY.

This was ascribed to the continuous drop of the monthly inflation

rate as of August 2008 to post a negative 4.9 percent at end of Dec. 2008 against a positive 1.0 percent at end of June of the same year.

Mining and quarrying accounted for most of the decline in the PPI during the period under review (18.6 percentage points), against a positive contribution of 5.3 percentage points during the period of comparison. The decline was ascribed to the negative contribution of crude oil whose prices sharply fell by 71.4 percent during the period under review against a 30.6 percent rise during the period of comparison.

PPI Price Index (2004/2005 = 100)

120

130

140

150

160

170

180

Dec.2007

Jan.

Feb.

March

April

MayJu

ne July

Aug.

Sep.

Oct. Nov.

Dec.2008

- 12 -

The contribution of manufacturing, and agriculture & fishing to the

PPI retreated during the period under review due to the drop in their price index.

PPI by Group* during the Year Ending Dec.

(2004/2005=100) Inflation Rate

during the Year Ending Dec. (%)

Share in General Index during the Year

Ending Dec. (percentage point)

Main PPI Groups

2007 2008 2007 2008 General Index 10.6 -0.3 10.6 -0.3 Agriculture, Forestry and Fishing 1.4 15.7 0.4 4.4 Mining and Quarrying 37.6 -47.5 8.0 -12.7 Manufacturing 5.3 19.5 1.9 6.6 Electricity and Gas 0.0 15.0 0.0 0.2 Water Supply Activities 0.0 8.4 0.0 0.2 Transportation and Storage 7.9 13.2 0.2 0.3 Food Services 5.3 14.3 0.1 0.6 Information and Communications 0.0 4.4 0.0 0.1

PPI Monthly infaltion rate for Mining and Quarring during 2008

-50

-30

-10

10

30

50

70

90

Dec.20

07 Jan.

Feb.

March

April MayJu

neJu

lyAug.

Sep.

Oct.Nov.

Dec.20

08

%

- 13 -

B- PPI by Group during (July/Dec.) (2004/2005= 100)

Inflation Rate (%)

July/Dec.

Share in General Index

July/Dec.

Main PPI Groups

2007/08 2008/09 2007/08 2008/09 General Index 9.8 -18.8 8.9 -18.8 Agriculture, Forestry and Fishing, of which: 7.8 -0.7 2.2 -0.2 Cereals and legumes 14.7 -21.6 0.6 -1.0 Rice 9.9 -42.2 0.1 -0.7 Poultry and eggs 9.2 -3.6 0.3 -0.1 Mining and Quarrying, of which 22.6 -62.1 5.3 -18.6 Crude oil 30.6 -71.4 8.3 -28.1 Sand and stone 8.0 3.7 0.0 0.0 Manufacturing, of which: 2.9 -1.5 1.1 -0.5 Processed food products, of which 7.0 6.7 0.6 0.5

-Oils and fats 41.7 10.8 0.4 0.1 -Dairy products 11.1 7.6 0.1 0.1

Manufacture of fertilizers 12.7 6.7 0.1 0.0 Wood & products 4.6 -3.8 0.0 0.0 Cement industry 5.5 7.0 0.1 0.1 Iron and steel industry 2.4 -25.4 0.1 -1.5 Electricity and Gas, of which: 0.0 0.9 0.0 0.0 Electric power generation and distribution 0.0 1.1 0.0 0.0 Water Supply Activities 0.0 0.0 0.0 0.0 Transportation and Storage, of which: 7.9 12.0 0.2 0.2 Land transport 8.2 0.0 0.0 0.0 Food Services, of which: 3.5 6.0 0.1 0.2 Meal serving services in limited-service facilities 22.9 7.4 0.1 0.0 Information and Communications 0.0 4.4 0.0 0.1 * According to the Producer Price Index Bulletin, issued by CAPMAS as of Sept.

2007 to replace the Wholesale Price Index Bulletin that was stopped as of Jan. 2008.

- 14 -

2: Monetary and Banking Developments 2/1: Monetary Policy and Monetary Aggregates

2/1/1: Monetary Policy

As the overriding objective of the monetary policy is price stability,

the CBE seeks to bring inflation to a stable and comfortable level, conducive to fostering confidence and sustaining appropriate levels of investment and economic growth. To this end, the Monetary Policy Committee (MPC), in its meetings in August and September 2008, decided to raise the CBE key interest rates (overnight deposits and lending rates) by 50 basis points each time. The discount rate was also raised during both meetings: by 100 basis points and subsequently by 50 basis points; to be equal to the overnight deposit rate at the CBE. The MPC decisions came in response to the rise in the annual CPI inflation to a peak of 23.6 percent at the end of August 2008, the highest record during the reporting period.

The key interest rates at the CBE were kept unchanged by the MPC

in its meetings held in November and December, as follows:

Overnight Deposit Rate

Overnight Lending Rate

Discount Rate

June 2008 10.50% 12.50% 10.00% August 2008 11.00% 13.00% 11.00% September-December 2008 11.50% 13.50% 11.50%

The aforementioned MPC decisions were reflected on the overnight interbank interest rates, as their weighted monthly average ranged between 10.50 percent and 11.87 percent during July/December 2008, compared to 10.10 percent in June 2008.

Given the excess liquidity at the banking system, the weighted

average of the overnight interbank interest rates approximated to the CBE overnight deposit rate during the period under review. (See the following chart)

- 15 -

Moreover, the rise in the overnight interbank interest rates was reflected on market interest rates. As such, the interest rate on three-month deposits averaged 7.7 percent in December 2008, against 6.8 percent in June 2008. The interest rates on one-year-or-less loans recorded an average of 12.2 percent in December 2008, against 11.6 percent in June 2008.

The outstanding balance of open market operations (conducted to

sterilize the effects of excess liquidity in the market) declined from LE 182.7 billion at the end of June 2008 to LE 123.2 billion at the end of December 2008. The decline was mainly caused by the CBE foreign currency sales to banks.

During its meetings dated 12 February and 26 March 2009,

(following the period under review), the MPC lowered the key interest rates at the CBE (overnight deposit and lending rates) and the discount rate by 100 basis points, and 50 basis points, respectively, to 10.0 percent, 12.0 percent and 10.0 percent, in order. The MPC decisions were prompted, in the first place, by the decline in the annual headline CPI inflation rate to 13.5 percent at the end of February 2009 from 20.3 percent at the end of November 2008. Other reasons included comparatively low risks to the domestic inflation outlook in the light of the sharply declining international commodity prices. Combined with this

Overnight Interbank Rate and Policy Rates

7.508.008.509.009.50

10.0010.5011.0011.5012.0012.5013.0013.5014.00

Dec-06

Jan-07

Feb-07

Mar-07

Apr-07

May-07

Jun-07

Jul-07

Aug-07

Sep-07

Oct-07

Nov-07

Dec-07

Jan-08

Feb-08

Mar-08

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

( % )

Overnight Interbank rate Deposit facility rate Lending facility rate

-16 -

was the decline in the annual real GDP growth rate to 4.1 percent in the second quarter of FY 2008/2009, from 5.8 percent in the first quarter, and 7.1 percent in FY 2007/2008, affected by the continued global economic slowdown. Finally, the MPC has projected a fall in the annual inflation rate towards the CBE’s comfort zone by mid-2009.

2/1/2: Reserve Money

Reserve money decreased by LE 2.0 billion or 1.2 percent during

July/December 2008/2009 (against an increase of LE 6.7 billion or 5.0 percent during the corresponding period of the previous FY), reaching LE 167.9 billion at the end of December 2008. Such a decrease was an outcome of the decline in banks' local currency deposits at the CBE by LE 11.9 billion and the rise in the currency in circulation outside the CBE by LE 9.9 billion.

Reserve Money and Counterpart Assets

(LE mn) Change during July/December 2007/2008 2008/2009

Balances at End of Dec. 2008

Value % Value % A- Reserve Money 167906 6700 5.0 (2005) (1.2)

Currency in circulation outside the CBE 121280 11500 12.5 9868 8.9Banks' local currency deposits

46626 (4800) (11.4) (11873) (20.3)

B- Counterpart Assets 167906 6700 5.0 (2005) (1.2)Net Foreign Assets 184397 11835 12.4 4064 2.3Foreign Assets 185787 12530 7.8 3766 2.1

Gold 8695 0 0.0 0 0.0Foreign securities 149271 9796 9.0 (1904) (1.3)Foreign currencies 27821 2734 6.1 5670 25.6

Foreign Liabilities 1390 695 1.1 (298) (17.7)Net Domestic Assets -16491 (5135) (13.3) (6069) 58.2

Claims on the Government (Net) 86147 (2520) (2.1) 4275 5.2Claims, of which: 158886 (529) (0.3) (811) (0.5)Government securities 123123 (1036) (0.6) 0 0.0Deposits 72739 1991 2.7 (5086) (6.5)

Claims on Banks (Net) 4169 8395 14.1 (73412) (94.6)Claims 24509 9269 12.0 (73319) (74.9)Foreign currency deposits

20340 874 4.9 93 0.5

Net Balancing Items -106807 (11011) 8.0 63068 (37.1)

- 17 -

A breakdown of the counterpart assets of reserve money showed that net domestic assets fell by LE 6.1 billion or 58.2 percent. In the meantime, net foreign assets increased by LE 4.1 billion worth or 2.3 percent. The decline in net domestic assets is largely attributed to the fall of LE 73.4 billion in net claims on banks (as an outcome of the LE 73.3 billion decline in the CBE claims on banks, and the increase of LE 0.1 billion worth in banks’ foreign currency deposits at the CBE). As for the CBE net claims on the government, they picked up by LE 4.3 billion (as a result of the decline in the CBE claims thereon by LE 0.8 billion and in government deposits at the CBE by LE 5.1 billion). The negative balance of other items (net) declined by LE 63.0 billion, largely because of the LE 59.7 billion drop in the deposits accepted with the CBE under the open market operations. This, in turn, is ascribed to the shrinkage of excess liquidity at the banking system and the rise in the CBE sales of foreign currencies to banks. As for net foreign assets at the CBE, the increase reflected the rise in its foreign assets by the equivalent of LE 3.8 billion, and the drop in its foreign liabilities by LE 0.3 billion worth.

2/1/3: Banknote Issue

Banknote issue (including subsidiary coins) went up by LE 10.0

billion or 8.9 percent during July/December 2008/2009, against LE 12.4 billion and 13.2 percent during the corresponding period of the previous FY, standing at LE 122.7 billion at the end of December 2008.

Banknote Issue and Change Rates*

(LE mn)

Annual Change Change during July/December At the End of Balance of

Banknote Issue Value % Value % June 2007 93499 14246 18.0 December 2007 105863 16690 18.7 12364 13.2 June 2008 112705 19206 20.5 December 2008 122724 16861 15.9 10019 8.9 * Including the subsidiary coins issued by the Ministry of Finance.

-18 -

The increase in banknote issue led to a rise in the currency in circulation outside the CBE by LE 9.9 billion or 8.9 percent, to LE 121.3 billion at the end of December 2008. The breakdown of the currency in circulation outside the CBE by denomination showed that the large notes of LE 100, LE 200 and LE 50 accounted for 88.8% of the total money in circulation. This emphasizes the continued preference for large notes, in the light of the high volume of transactions that accompanied the rise in prices and the change in purchase patterns.

Change in the relative structure of the currency in circulation

brought down the average value per note from LE 30.29 at the end of June 2008 to LE 26.66 at the end of December 2008.

Currency in Circulation outside the CBE*

(LE mn)

June 2008 December 2008 Change during July/ December

Denominations Value Relative Im-

portance

Value Relative Im-

portance

2007/08 2008/09

Total 111412 100.0 121282 100.0 12.5 8.9Subsidiary Denominations (Notes) 275 0.2 282 0.2 4.2 2.5Banknote in Circulation 111137 99.8 121000 99.8 12.5 8.9PT 25 145 0.1 183 0.2 16.2 26.2PT 50 242 0.2 365 0.3 19.3 50.8LE 1 591 0.5 919 0.8 19.5 55.5LE 5 1105 1.0 1432 1.2 (4.0) 29.6LE 10 2845 2.6 3217 2.6 (6.6) 13.1LE 20 7194 6.5 7221 5.9 (4.2) 0.4LE 50 25422 22.8 24638 20.3 (4.2) (3.1)LE 100 54529 49.0 56636 46.7 7.6 3.9LE 200 19064 17.1 26389 21.8 311.7 38.4

* Representing the difference between banknote issue and cash at the CBE vaults.

2/1/4: Domestic Liquidity (M2) and Counterpart Assets

Domestic liquidity (M2) reached LE 791.4 billion at the end of December 2008, recording a lower growth of LE 24.7 billion or 3.2 percent in the reporting period, against LE 53.6 billion or 8.1 percent in the previous corresponding period.

- 19 -

2.23.1

0.5

5.25.0

2.7

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

2006/2007 2007/2008 2008/2009

Quasi-Money

Money Supply

Domestic Liquidity

(%)Growth Rate of Domestic Liquidity by

Component during July/Dec.

The pick-up in domestic liquidity during the period resulted from the

increase in money supply and quasi-money. Money supply scaled up by LE 3.9 billion or 2.3 percent against LE 20.5 billion or 15.6 percent, reaching LE 174.5 billion or 22.0 percent of domestic liquidity at the end of December 2008. The slight increase in money supply (M1) was an outcome of the LE 9.4 billion rise in money in circulation outside the banking system, and the LE 5.5 billion drop in demand deposits in local currency, due to the decrease in the deposits of all sectors. This can be explained by the fact that, as prices remained high, part of these deposits was directed to consumption purposes, or rather converted into time and saving deposits to benefit from the relatively high interest rates during the period.

- 20 -

Domestic Liquidity Structure (LE mn)

Change during July/December

End of December 2008 2007/2008 2008/2009

Balance Relative

Im- portance

Value % Value %

Domestic Liquidity (M2) 791378 100.0 53587 8.1 24714 3.2 Money Supply (M1) 174460 22.0 20510 15.6 3881 2.3 Currency in circulation outside the banking system 114036 14.4 9816 11.3 9380 9.0 Local currency demand deposits 60424 7.6 10694 24.1 (5499) (8.3) Quasi-Money 616918 78.0 33077 6.2 20833 3.5 Time and Saving Deposits in Local Currency 453733 57.4 26812 7.1 17465 4.0 Foreign Currency Deposits 163185 20.6 6265 4.1 3368 2.1 - Demand 25889 3.3 (41) (0.2) (692) (2.6) - Time and saving 137296 17.3 6306 5.0 4060 3.0

Quasi-money went up by LE 20.8 billion or 3.5 percent, reaching LE

616.9 billion or 78.0 percent of the total domestic liquidity at the end of December 2008. The bulk of the increase (83.8 percent) emanated from the rise of LE 17.4 billion or 4.0 percent in time and saving deposits in local currency, while foreign currency deposits realized a tiny rise of LE 3.4 billion worth or 2.1 percent. This signified the continued confidence of individuals in the local currency as a saving vessel.

Dollarization Rate (Deposits in US$/Total Deposits) & Interest Rates on Deposits in LE & US$

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

June 06 Sept. Dec. March 07 June Sept. Dec. March 08 June Sept. Dec.22

24

26

28

30

Interest rate on 3-month deposits in LE

Interest rate on 3-month deposits in US$

Dollarization rate

(%)(%)

- 21 -

The household sector contributed about 6.5 percentage points of the

growth rate of total LE time and saving deposits. Its deposits showed a rise of LE 28.5 billion or 8.6 percent. The public business sector contributed some 0.8 percentage points. On the other hand, contribution of the private business sector fell by 3.3 percentage points, as a reflection of the drop in its deposits by LE 14.3 billion or 16.7 percent, mainly due to the decrease in the deposits of mutual funds at banks. This may give evidence of the mounting trend among the public to liquidate their documents at mutual funds and on the stock market, preferring to replace them with time and saving deposits at banks, to take advantage of their comparatively high interest rates compared to the declining prices of investment documents influenced by the weak EGX performance.

Domestic Liquidity Growth Rate

By Counterpart Assets

July/December + (-) 2007/2008 2008/2009

Domestic Liquidity Growth Rate 8.1 3.2 - Net foreign assets 2.1 (7.2) - Net domestic assets 6.0 10.4 Domestic credit assets 5.5 11.8 Net balancing items (unclassified) 0.5 (1.4)

As for the domestic liquidity growth rate by counterpart assets, net

domestic assets showed a positive contribution (10.4 percentage points) to the domestic liquidity growth. It is worthy to note that this growth could have been larger but for the drop in the contribution of net foreign assets (7.2 percentage points). Net domestic assets mounted by LE 79.9 billion or 17.3 percent, whereas net foreign assets at the banking system declined by LE 55.2 billion worth or 18.2 percent. The decline in net foreign assets was an outcome of the fall of LE 59.3 billion worth in net foreign assets at banks, and their rise by LE 4.1 billion worth at the CBE. The global financial crisis is chiefly to blame for the contraction in foreign assets at banks, as they had to provide for their cash flows abroad by draining on these assets and the resources of the interbank foreign currency market.

-22 -

Domestic Liquidity Counterpart Assets (LE mn)

Change during July/December

End of December 2008 2007/2008 2008/2009 Balances Relative

Importance Value % Value %

Domestic Liquidity Counterpart Assets 791378 100.0 53587 8.1 24714 3.2 Net Foreign Assets 248470 31.4 14029 6.4 (55210) (18.2) - The CBE 184397 23.3 11835 12.4 4064 2.3 - Other banks 64073 8.1 2194 1.8 (59274) (48.1) Domestic Credit 661796 83.6 36193 6.8 90843 15.9 Government (net) 244418 30.9 14838 8.3 70413 40.5 Public business sector 28840 3.6 3197 13.1 1943 7.2 Private business sector 302158 38.2 9594 3.6 10439 3.6

Household sector 86380 10.9 8564 14.3 8048 10.3 Other Items (Net) -118888 -15.0 3365 (3.9) (10919) 10.1

Credit extended by the banking system notably rose by LE 90.8

billion or 15.9 percent during the period under review, against LE 36.2 billion or 6.8 percent in the period of comparison, reaching LE 661.8 billion at the end of December 2008. More than two thirds of the rise in total credit (77.5 percent) was attributed to the surge of LE 70.4 billion or 40.5 percent in the banking system's net claims on the government (total credit to the government less its deposits at the banking system) to reach LE 244.4 billion or 36.9 percent of total domestic credit. The surge was an outcome of the increase in banks’ holdings of government securities and treasury bills by LE 71.6 billion, together with the decline in the loans to the government by LE 0.3 billion and the rise in its deposits by LE 0.9 billion.

The private business sector accounted for about LE 10.4 billion or

11.5 percent of the total increase in credit during the reporting period, with a share of LE 302.2 billion or 45.7 percent of total credit at the end of December 2008. Credit to the household sector also edged up by LE 8.1 billion or 10.3 percent, against LE 8.6 billion and 14.3 percent, reaching LE 86.4 billion or 13.0 percent of total domestic credit at the end of December 2008. The rise was partly ascribed to banks’ expansion in their retail business.

- 23 - The public business sector received credit facilities of LE 28.8

billion at the end of December 2008, with a slight rise of LE 1.9 billion or 2.1 percent of the increase in domestic credit.

Obviously, net balancing items had a contractional effect on

domestic liquidity, driving up its negative balance to LE 118.9 billion at the end of December 2008, with a rise of LE 10.9 billion during the period under review. This was an outcome of an increase of LE 8.0 billion in capital balances and a decline of LE 2.9 billion in net unclassified assets and liabilities. 2/1/5: Payment Systems and Information Technology (IT)

In July/December 2008/2009, more efforts were exerted to improve

the payment systems and IT in the CBE, in recognition of their role in facilitating the exchange of assets and services among economic units. No doubt, payment systems do not only minimize credit and settlement risks but also speed up and enhance the reliability of payment settlements, and ultimately reflect positively on economic performance as well as liquidity management. In mid March 2009 (subsequent to the reporting period), the final operation of the real time gross settlement system (RTGS) was initiated at the CBE, in consistency with the regulation of

Growth In Domestic Credit by Sectors During Jul./Dec.

-10123456789

10111213141516

2006 2007 2008

Government Sector (net) Public Business Sector Private Business Sector Household SectorDomestic Credit Growth

(%)

- 24 - the European Commission. This major achievement was accomplished by the CBE, in cooperation with one of the leading companies in this field, after having completed the final arrangements for this step, with participation by all Egyptian banks and a group of foreign expertise. The following steps were taken to ensure adaptability of the working systems to RTGS: • Furnishing the CBE branches in Alexandria and Port-Said with

more advanced PCs, while linking these branches to the RTGS and making the necessary tests.

• Finalizing the “Disaster Recovery” site of the RTGS system and all related applications. Tests have been already conducted to ensure that this site is functional as a substitute in case of emergency.

• Efforts to raise the efficiency of the interface with both the SWIFT and banks are under way, to meet the requirements of the RTGS system.

In addition: • A project was implemented, in coordination with the National

Bank of Egypt, to apply the ATM system to the salaries of the CBE employees.

• The CBE is in the process of preparing a study - in collaboration with Ministry of Finance - on applying the ATM cards, on the salaries of 6 million government employees.

• A special study is being conducted on the purchase of a new Financial System for the CBE, to meet the requirements of its financial sector.

- 25 - 2/1/6: SWIFT Local Service and Clearing Houses Activity

Data on the local banking transfers via the SWIFT Fin-Copy system,

indicated a rise in the number of executed messages in the Egyptian pound to 411.3 thousand transactions during July/Dec. of FY 2008/2009, from 326.5 thousand during the corresponding period. Nonetheless, their value dropped from LE 1551.5 billion to LE 1490.5 billion in the reporting period. On the other hand, the number of messages executed in foreign currencies, via this system, increased in terms of both value and number during the period. Their number reached 7.2 thousand transactions at a value of US$ 55.7 billion (against 6.3 thousand transactions at a value of US$ 47.9 billion during the period of comparison).

SWIFT Local Service Activity

July/December 2006/2007 2007/2008 2008/2009 Change

(1) (2) (3) (2) - (1) (3) - (2) First: in Local Currency Number of messages (unit) 244767 326497 411325 81730 84828Value of executed transfers (LE mn) 1007981 1551530 1490541 543549 (60989)Second: in Foreign Currencies Number of messages (unit) 5416 6284 7209 868 925Value of executed transfers (US$ mn) 26021 47872 55729 21851 7857

According to the statistics of CBE Automated Clearing House, the

number and value of exchanged cheques rose during the period. Their number reached 5.7 million, with a total value of LE 269.9 billion (against 5.6 million cheques with a total value of LE 217.3 billion). Consequently, the average value per cheque rose to LE 47.1 thousand during the reporting period, from LE 38.5 thousand in the period of comparison.

CBE Automated Clearing House

Change %

Number of Cheques (000s)

Value of Cheques (LE mn) Number Value

July/December 2007/2008 5644 217346 14.4 34.3 July/December 2008/2009 5727 269858 1.5 24.2

- 26-

2/2: Banking and Credit Developments 2/2/1: Banking Sector Reform

The Central Bank of Egypt continued to press forward with its banking reform plan, launched in September 2004, and the final preparations for the second stage are on track at the time being. This multi-pillar plan, primarily focuses on the application of Basel II standards in the banking sector. Meanwhile, a protocol was signed with the European Central Bank and seven European central banks to provide a three-year technical assistance program to be initiated on 1 January 2009, to apply Basel II standards in the banking sector.

Preparations for the second stage of the banking reform began after the first stage was successfully implemented. The first stage was centered on four pillars: (1) consolidation and privatization of the banking sector, (2) financial and managerial restructuring of state-owned banks, (3) addressing of the problem of non-performing loans, (4) upgrading of the supervision sector at the CBE. As for the first pillar some voluntary and state-forced mergers took place, leading to a decrease in the number of banks operating in Egypt from 57 at the end of December 2004 to 39 banks at the end of December 2008. Under this plan, 80 % of the stake of the Bank of Alexandria was sold to Italy’s Sanpaolo Bank, besides the divestiture of the holdings of state-owned banks in a number of joint venture and private banks. Under the second pillar, state-owned banks were restructured according to a comprehensive and time-lined plan, designed by the Banking Reform Unit at the CBE. The plan was intended to reform the practices of all departments and technological systems, while establishing new departments, particularly for risk management, information technology (IT) & management information systems (MIS) and human resources. Meanwhile, a project was implemented on the time scheduled to apply the best international practices, with the assistance of foreign consultants. In addition, a full audit of state-owned banks was completed according to the international accounting standards from 2004 to 2007. Finally, the recruitment of highly qualified banking cadres and

- 27 - leaderships by state-owned banks (with finance from the Banking Reform Fund), enabled these banks to push ahead with reform and development, by making available the necessary skilled staff and expertise.

As for the third pillar; to address the problem of non-performing loans, the CBE's NPL Management Unit worked out a variety of methods and programs that helped to settle around 90 percent of the NPLs (excluding debts of the public business sector). With regard to the irregular debts of the public business sector enterprises to public banks, an amount of LE 16 billion was repaid in cash to those banks. In addition, the ministries of Finance and Investment pledged to repay the remaining debts (LE 10 billion) from future privatizations.

A program for the reform of the Bank Supervision Sector was devised to achieve the following: enhance the efficiency of this sector by benefiting from the best international practices, and apply the concept of risk-based supervision to ensure its robustness and soundness. Furthermore, efforts were exerted to recruit highly qualified banking staff, acquainted with new technology, raise the efficiency of human cadres to be capable of managing and reforming this key sector, and upgrade the management information system (MIS) to ensure timely access to accurate data. In this context, a technical assistance program was completed - in collaboration with the European Central Bank (ECB) and four European central banks - in the last quarter of 2007. It is worthy to note that the successful and timely implementation of the first stage of the CBE's banking reform plan has started to yield fruit, helping this sector to weather the adverse effects of the world financial crisis.

The aggregate financial position of the registered banks operating

in Egypt (39 banks at end of December 2008) posted LE 1.0 trillion at end of December 2008, declining by LE 37.7 billion or 3.5 percent during July/December of FY 2008/2009, against an increase of LE 82.1 billion or 8.8 percent during the corresponding period of the previous FY.

2/2/2: Overview of Banks' Aggregate Financial Position

- 28 - On the liabilities side, the decline was primarily due to a drop in

obligations to local banks by LE 74.3 billion (around LE 73.5 billion are owed to the CBE, representing its foreign currency deposits at banks). Meanwhile, bonds and long-term loans dropped by LE 2.1 billion or 9.4 percent. However, the decline in liabilities was held back by the rise in deposits by LE 20.5 billion, and in provisions at banks by LE 9.1 billion. In this respect, for provisions to be augmented or to make up for any shortage therein, their balances were raised to LE 71.4 billion or 16.6 percent of the total lending and discount balances at end of December 2008. Furthermore, obligations to banks abroad went up by LE 6.0 billion worth.

On the assets side, the decline mainly stemmed from the decrease in balances with local banks by LE 73.3 billion (LE 71.7 billion of which were in the balances with the CBE), and the fall in those with banks abroad by LE 57.9 billion worth. This decline was offset by the pick-up in the balances of portfolio investments (including treasury bills) by LE 66.8 billion and in lending and discount balances by LE 27.8 billion worth.

- 29 -

Banks' Aggregate Financial Position (LE mn)

Change during Change during Dec. July/Dec. July/Dec. Balances at End of 2008 2007/2008 2008/2009 2007/2008

% 2008/2009

% Cash 10363 3008 102 39.0 1.0 Securities and investments 268658 7138 66800 4.1 33.1 Balances with banks abroad 64918 (2940) (57874) (2.4) (47.1) Balances with the CBE 190636 42155 (71650) 21.1 (27.3) Balances with local banks 14221 421 (1678) 2.4 (10.5) Loan and discount balances 429188 28027 27763 7.9 6.9 Other assets 67630 4281 (1160) 7.3 (1.7) (Assets = Liabilities) 1045614 82090 (37697) 8.8 (3.5) Capital 39347 216 2052 0.7 5.5 Reserves 15615 (156) (526) (1.2) (3.3) Provisions 71378 10663 9064 19.9 14.5 Bonds & long-term loans 20197 (5422) (2088) (20.6) (9.4) Obligations to banks abroad 19368 2155 6041 21.5 45.3 Obligations to the CBE 10672 10814 (73494) 16.3 (87.3) Obligations to local banks 13695 874 (838) 5.4 (5.8) Deposits 767668 50797 20469 7.8 2.7 Other liabilities 87674 12150 1623 17.4 1.9

Relative Structure of Banking Assets (End of Dec-2008)

Balances with Local Banks

19.6%

Securities & Investments

25.7%

Balances with Banks Abroad

6.2%

Loan & Discount Balances

41.0%

Other Assets6.5%

Cash1.0%

Relative Structure of Banking Liabilities (End of Dec-2008)

Total Deposits73.4%

Capital3.8%

Obligations to Banks Abroad

1.9%

Obligations to Local Banks

2.3%

Bonds & Long-term Loans

1.9%Reserves

1.5%

Provisions6.8%

Other Liabilities8.4%

- 30 - The rise in banks' investments in securities and treasury bills during the period was an outcome of the pick-up in their investments in treasury bills by LE 72.9 billion, and the decline in their corporate equity participations by LE 4.4 billion, in government bonds by LE 1.5 billion, and in non-government bonds and foreign securities by the equivalent of LE 0.1 billion each.

Banks' Transactions with Their Correspondents Abroad Egyptian Banks' net balances with their correspondents abroad declined by the equivalent of LE 63.9 billion or 58.4 percent, as their net transactions reached LE 45.6 billion at end of December 2008. This decline was an outcome of a decrease in banks' balances with their correspondents by the equivalent of LE 57.9 billion, on the one hand, and a pick-up in their obligations to their correspondents by the equivalent of LE 6.0 billion worth on the other.

Transactions with Banks Abroad (LE mn)

Change during July/Dec. At End of June 2008 Dec. 2008 2007/2008 2008/2009 Value % Value % Net Position 109465 45550 (5095) (4.5) (63915) (58.4) Balances at banks abroad 122792 64918 (2940) (2.4) (57874) (47.1) Obligations to banks abroad 13327 19368 2155 21.5 6041 45.3

Relative Structure of Banks' Portfolio Investment End of Jun-2008

Non-gov. Bonds

3%

Corp. Equities16%

Foreign Securities

8%

Gov. Bonds32%

Treasury Bills41%

Relative Structure of Banks' Portfolio Investment End of Dec-2008

Non-gov . Bonds

2%

Corp. Equities

11%

Foreign Securities

6%

Gov . Bonds23%

Treasury Bills58%

-31 - 2/2/3: Interbank Money Market in Egypt The volume of transactions in the interbank money market in Egypt (in terms of deposits) retreated by LE 1.7 billion, totaling LE 14.2 billion. This was due to the fall in local currency deposits by LE 3.3 billion, and the surge in foreign currency deposits by LE 1.6 billion worth.

Deposits at banks grew by LE 20.5 billion or 2.7 percent during the period under review, (against LE 50.8 billion and 7.8 percent during the corresponding period of the previous FY), to reach LE 767.7 billion or 73.4 percent of banks' aggregate financial position at the end of December 2008. In view of the propensity to save in the local currency, the increase was largely in LE deposits which scaled up by LE 13.3 billion or 2.4 percent to LE 565.4 billion, representing 73.6 percent of total deposits at banks at end of December 2008.

2/2/4: Deposits

Interbank Money Market in Egypt

8.97.05.6

8.6

-3.3

1.6

-4

-2

0

2

4

6

8

10

Local Currency Deposits Foreign Currency Deposits

(LE bn)

Jun 08 Dec 08 Change during Jul/Dec 2008/2009

- 32 -

Deposits at Banks (LE mn)

Change during July/Dec.

2007/2008 2008/2009Balances at End of Dec. 2008 Relative Importance

(%) (%) (%) Total Deposits 767668 100 7.8 2.7 In Local Currency 565374 73.6 9.7 2.4 Government sector 47659 6.2 20.3 6.4 Public business sector 30176 3.9 12.9 2.5 Private business sector 102175 13.3 28.1 (24.9) Household sector 382345 49.8 3.8 8.0 External sector 3019 0.4 2.2 (14.7) In Foreign Currencies 202294 26.4 3.2 3.7 Government sector 37016 4.8 1.0 11.5 Public business sector 10032 1.3 32.2 9.7 Private business sector 59405 7.8 13.9 3.9 Household sector 93938 12.2 (2.7) 0.3 External sector 1903 0.3 (28.0) (0.7)

The growth rate of the household sector's deposits in local currency during the period under review outpaced that of the total LE deposits during the same period. Thus, the household sector's deposits grew at a rate of 8.0 percent or LE 28.2 billion, to LE 382.3 billion, accounting for 67.6 percent of the total local currency deposits at the end of December 2008. As for the LE deposits of the private business sector, a retreat of LE 17.5 billion or 14.7 percent was noted, emanating from the decline in the deposits of mutual funds.

Change in Total Deposits & Semi-annual Growth Rate

20469

50797 2.7

7.8

0

10000

20000

30000

40000

50000

60000

2008/2009 2007/2008

(LE mn)

0.0

2.0

4.0

6.0

8.0

10.0

(%)

Change in Total Deposits Semi-annual Growth Rate

- 33 -

On the other hand, foreign currency deposits at banks edged up by

LE 7.2 billion worth or 3.7 percent, to total the equivalent of LE 202.3 billion at end of December 2008. More than half of this rise (53.2 percent) stemmed from the pick-up in government deposits, up by LE 3.8 billion worth or 11.5 percent. Likewise, the private business sector's deposits went up by the equivalent of LE 2.2 billion, while the rises in the deposits of the public business and household sectors were only by the equivalent of LE 0.9 billion and LE 0.3 billion, respectively.

Change in Sectors' Deposits in Local CurrencyDuring July/December

-30.0-20.0-10.0

0.010.020.030.040.050.0

Governmentsector

Public businesssector

Privatebusiness

sector

Householdsector

Foreign sector Total

LE bn

2007/20082008/2009

Change in Sectors' Deposits in Foreign CurrenciesDuring July/December

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

Governmentsector

Publicbusiness

sector

Privatebusiness

sector

Householdsector

Foreignsector

Total

LE bn

2007/20082008/2009

- 34 -

Banks' lending and discount balances increased by LE 27.8 billion or 6.9 percent during July/December of FY 2008/2009, against LE 28.0 billion or 7.9 percent during the corresponding period of the previous FY, totaling LE 429.2 billion, and representing 41.0 percent of total assets and 55.9 percent of total deposits at end of December 2008.

Around 64.2 percent of the increase in lending and discount balances was concentrated in local currency loans, which significantly rose by LE 17.8 billion or 6.7 percent, against LE 10.2 billion and 4.1 percent, standing at LE 285.0 billion at the end of December 2008. The private business sector received more than half of the rise in local currency loans (56.3 percent), since its loans climbed by LE 10.0 billion or 6.0 percent, bringing its debt to LE 177.3 billion or 62.2 percent of banks' total lending and discount balances in local currency at the end of December 2008. The manufacturing units obtained the lion's share of these loans, accounting for 73.8 percent of this rise, followed by trade (25.5 percent). In addition, the household sector's loans increased by LE 8.1 billion or 11.6 percent.

2/2/5: Lending Activity

Loans / DepositsEnd of

404550556065707580

Jun 2007 Dec 2007 Jun 2008 Dec 2008

%

Total Loans/Total Deposits

Local Currency Loans/Local Currency Deposits

Foreign Currencies Loans / Foreign Currencies Deposits

- 35 -

Lending and Discount Balances by Sector

(LE mn) Change during July/Dec. 2007/2008 2008/2009 At End of Dec. 2008

Relative Importance

(%) (%) (%) Total 429188 100.0 7.9 6.9 In Local Currency 284982 66.4 4.1 6.7 Government sector 8034 1.9 2.2 (17.2) Public business sector 20690 4.8 8.4 6.2 Private business sector 177279 41.3 0.5 6.0 Household sector 77950 18.2 14.1 11.6 External sector 1029 0.2 (24.2) 14.7 In Foreign Currencies 144206 33.6 16.9 7.4 Government sector 23645 5.5 31.7 10.2 Public business sector 7978 1.9 26.9 11.2 Private business sector 95401 22.2 7.4 5.0 Household sector 8430 2.0 16.5 (0.8) External sector 8752 2.0 176.1 38.9

Change in Lending and Discount Balances in Local Currency

During July/December

-5.0

0.0

5.0

10.0

15.0

20.0

Gov

ernm

ent

sect

or

Publ

icbu

sine

ssse

ctor

Priv

ate

busi

ness

sect

or

Hou

seho

ldse

ctor

Fore

ign

sect

or

Tota

l

LE bn

2007/2008

2008/2009

- 36 - Loan and discount balances in foreign currencies went up by LE

9.9 billion worth or 7.4 percent, posting LE 144.2 billion worth at the end of December 2008. The increase reflected mainly the rise in loans to the private business sector by the equivalent of LE 4.6 billion (mostly to the trade sector with a share of 56.8 percent). In addition to this, loans to the external sector went up by LE 2.4 billion worth and to the government sector by LE 2.2 billion. In the meantime, the public business sector accounted for a scanty increase of LE 0.8 billion; while loans to the household sector retreated by LE 0.1 billion.

Change in Lending and Discount Balances in Foreign Currencies During July/December

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

Governmentsector

Public businesssector

Private businesssector

Householdsector

Foreign sector Total

LE bn

2007/20082008/2009

- 37 -

3: Stock Exchange

During October/December 2008/2009, a number of decrees were issued to improve its regulation of the Egyptian Stock Exchange. Salient of these was the Minister of Investment's decree No. 231 for 2008 on the determination of brokerage commissions, listing fees of securities and cost of services for deals on the stock exchange. Article (1) of this decree provided that a brokerage firm should be in agreement with its clients on the commission on securities transactions undertaken in favor of clients. The commission should not be less than LE 2 per invoice (the invoice herein refers to the value of a transaction on a certain security in favor of a certain client), even if more than one transaction is executed on the same invoice in the same trading session. Moreover, the stock market shall have the cost of transactions as follows: LE 12 per each LE 100.000 of the value of each deal on listed securities, and LE 1 per each LE 1.000 of the value of each deal on non-listed securities, with a maximum of LE 5.000 for each category of securities. For listed securities, the services costs shall be paid by the seller and buyer via the brokerage firm, and shall be delivered to the EGX within three working days, starting from the date of the execution of the deal. For unlisted securities, the services cost shall be delivered within three working days, starting from the date of listing the deal on the Exchange and before issuing any certificate of ownership transfer. As for listing fees, a brokerage firm shall pay an annual fee (in January of every year) for listing every issuance of shares. The fee shall be LE 2 per thousand of the value of each issuance; the maximum annual fee shall be fifty thousand pounds and the minimum shall be ten thousand pounds. For securities other than shares, the percentage shall be 0.75 per thousand of the value of each issuance; the maximum annual fee shall be fifty thousand pounds and the minimum shall be five thousand pounds.

Moreover, the Capital Market Authority issued Decision no. 102

for 2008 to specify the value of the deposit that securities firm shall deposit at the CMA, as a requirement for being granted a license. The value shall be calculated as a percentage of the issued capital and, for every activity, it shall not be less than 25 thousand Egyptian pounds. In addition, the CMA shall deduct a sum of money from the deposit in case of violating the Capital Market Law. However, it shall be refunded to the company in case the CMA issues a decision to cancel the granted

- 38 - license, within a maximum period of 90 days from the date of issuing the said decision. Finally, the firms shall place this deposit within a period lapsing on 31 March 2009.

To maintain stability and discourage speculation practices, the

EGX decided that the trading system shall not accept any orders exceeding 20 percent of the opening price for the shares traded without price limits, effective 12/10/2008.

It is worth mentioning that the Egyptian Stock Chairman has been

elected a board member of the World Federation of Exchanges that comprises 15 members.

The CMA has granted licenses for five institutions to act as

nominated advisors for medium and small companies that desire to be listed in the NILEX. This brought the number of nominated advisors to seventeen.

Furthermore, the Minister of Investment issued decree No. 234 for

2008 during the reporting period, to amend the Egyptian Accounting Standards. The amendment was made to Standard No. 26 (issued by Ministerial decree No. 243 for 2006) regarding the reclassification of financial assets that are no longer held for the purposes of sale or repurchase in the near future. Also, Standard No. 25 (concerning the enterprise’s disclosure of the reclassification of financial assets) was amended. To enforce this decree, the CMA issued a decision extending the deadline granted to listed companies to present their financial statements (ended on 30/9/2008), by extra 15 days, to a date not later than 30/11/2008.

The global financial crisis and its spillovers triggered a downtrend

in the Egyptian Exchange, with the result that CASE 30 index declined by 53.2 percent during July/December 2008/2009 (against a rise of 35.2 percent during the corresponding period a year earlier), posting 4596.5 points at the end of December 2008. Likewise, CMA index fell by 52.8 percent during the period (against a 24.8 percent rise during the period of comparison), recording 1573.1 points at the end of December 2008.

- 39 -

Indicators of overall dealing in shares and bonds on the floor and

over the counter revealed a pickup of 15.7 percent in the number of traded securities during July/December 2008/2009, to some 10.4 billion securities. The value of these securities went down by LE 86.3 billion or 40.3 percent, to LE 128.0 billion at the end of December 2008. Shares accounted for 95.2 percent of the total value of traded securities during the period.

Retailers’ transactions represented 61.8 percent of the total trading

value at the end of December 2008, compared with 56.9 percent at the end of June 2008. Moreover, transactions of institutions accounted for 38.2 percent against 43.1 percent.

Total Foreigners' transactions retreated during the period under

review, compared with a year earlier. This was attributed to the global financial crisis, as many investors fled the Egyptian stock market to cover their financial positions abroad. Consequently, foreigners’ transactions unfolded net sales of LE 1.9 billion during the period, against LE 5.4 billion during the period of comparison.

Foreign Investors' Transactions During Jul./Dec.

-10

0

10

20

30

40

50

60PurchasesSalesNet

LE bn

2007/2008 2008/2009

CMA & CASE 30 Indices

10003000500070009000

1100013000

Sep. 0

7

Oct. 07

Nov. 0

7

Dec. 0

7

Jan.0

8

Feb. 0

8

Mar. 08

Apr. 08

May. 0

8

Jun.

08Ju

l.08

Aug. 0

8

Sep. 0

8

Oct. 08

Nov. 0

8

Dec. 0

8

Case 30

Capital Market Authority

- 40 - 3/1: Shares Market

3/1/1: Primary (Issue) Market

A) New Issues

During July/December 2008-2009, the CMA approved 1622 new

issues. Of these issues, 1085 went to new incorporations which accounted for 533 million shares at a value of LE 7.7 billion or 18.1 percent of the total value of issues. Issues to increase the capital of existing companies amounted to 537 (2.6 billion shares at a value of LE 34.8 billion or 81.9 percent of the total value of issues during the period).

New Share Issues on the Exchange

December/July During 2007/2008 2008/2009

Total Number of Issues (Unit) 1581 1622 New incorporations 1071 1085 Capital increase 510 537 Total Number of Shares (mn) 6786 3101 New incorporations 1577 533 Capital increase 5209 2568 Total Value of Shares (LE mn) 66908 42533 New incorporations 11017 7685 Capital increase 55891 34848

Source: CMA. B) Companies Listed on the Exchange

The number of companies listed on the Stock Exchange went down

from 377 at end of June 2008 to 373 at end of December 2008. On the other hand, the nominal value of the capital of listed companies mounted to LE 150.4 billion against LE 138.0 billion. By contrast, the market value of their capital declined from LE 813.3 billion at the end of June 2008 to LE 473.6 billion at end of December 2008. The drop in the market capital was ascribed to a fall in most share prices on the Exchange as its performance slackened lately due to the global financial crisis.

- 41 -

Companies Listed on the Exchange (LE mn)

June 2008 December 2008 At End of No. of

Companies (Unit)

Nominal Capital

Market Capital

No. of Companies

(Unit)

Nominal Capital

Market Capital

Total 377 137974 813341 373 150399 473636

Official schedules 121 65897 644180 120 74234 266407Unofficial schedules 255 72027 169111 252 76115 207179Temporary schedule 1 50 50 1 50 50

Source: The Egyptian Exchange.

The sectoral distribution of market capital shows that investors continued to be chiefly attracted to the sector of finance, insurance and real estate. As a result, this sector accounted for a relatively higher share of 47.4 percent of the total market value at the end of December 2008, against 45.5 percent at the end of June 2008. The manufacturing sector came next, despite the decline in its relative share from 29.6 percent to 26.4 percent.

3/1/2: Secondary (Trading) Market

The total value of traded shares on the floor and over the counter (in LE and foreign currencies) dramatically fell to LE 121.9 billion during the period, against LE 203.7 billion during the comparison period. Shares

Jun-08

0.4%9.7%

13.7%

45.5%

0.7% 0.5%

29.5%

Agriculture, Forestry and Fishing

Construction

Manufacturing

Transportation, Communication,Electricity, Natural gas, healthWholesale and Retail Trade

Finance, Insurance and RealEstateServices

Dec-08

0.5%

26.4%

47.5%13.8%

0.6%

10.7% 0.5%

Market Capital by Sector (%)

- 42 - traded on the floor accounted for 84.7 percent of total value of trades. Transactions in LE shares recorded 97.0 percent of total trades, with a total value of LE 100.2 billion, whereas trades in US dollar shares on the floor reached US$ 568 million. On the other hand, shares traded OTC posted LE 18.6 billion, of which 96.2 percent were in Egyptian pound.

Trading in Shares on the Exchange July/Dec.

2007/2008 2008/2009

No. of Transactions

(Unit)

Volume (000s)

Market Value (mn)

No. of Transactions

(Unit)

Volume (000s)

Market Value (mn)

Total Trading 4827306 8982590 203748 5028387 10326041 121871On the Floor 4629516 6384580 172850 4728744 8297957 103265Shares in LE 4509507 5991022 167584 4613864 7962395 100174Shares in foreign currencies 120009 393558 5266 114880 335562 3091Over the Counter 197790 2598010 30898 299643 2028084 18606Shares in LE 195243 2074920 24613 294361 2016351 17892Shares in foreign currencies 2547 5230910 6285 5282 11733 714Source: CMA.

Against this backdrop, the sector indices manifested a lower performance, mainly the sectors of real estate, main resources and financial services (excluding banks) with rates of decline amounting to 66.3 percent, 63.2 percent and 61.0 percent, in order.

Change in Sector Indices during July/December 2008/2009

-60.3%

-49.9%

-55.8%

-45.3%

-60.7%

-61.0%

-38.4%

-66.3%

-56.4%

-63.2%

-46.0%

-21.8%

-70%-60%-50%-40%-30%-20%-10%0%

Construction and Materials

Chemicals

Personal & Household Prod.

Industrial Goods & Services

Travel & Leisure

Financial Services (excl. Banks)

Banks

Real Estate

Food & Beverages

Healthcare & medicine

Basic Resources

Communications

- 43 -

3/2: Bonds Market

3/2/1: Primary (Issue) Market

Total value of issued bonds (listed) decreased by LE 5.7 billion

during July/December 2008/2009, posting LE 78.9 billion at end of December 2008. The decrease came over all bonds (government and non-government), mainly because of the redemption of Egyptian treasury bonds (under primary dealers system) in the amount of LE 5.0 billion during the period, bringing their value to LE 69.5 billion or 88.1 percent of total listed bonds at the end of December 2008.

Bonds Listed on the Exchange

(LE mn) June 2008 December 2008 At End of

Value % Value % Total 84547 100.0 78937 100.0 Government Bonds 78771 93.2 73722 93.4 - Treasury bonds 4000 4.7 4000 5.1 - Treasury bonds (primary dealers system) 74500 88.2 69500 88.1 - Housing bonds 118 0.1 116 0.1

- - Dollar development bonds 153 0.2 106 0.1 Corporate & Bank Bonds 3880 4.6 3518 4.5 Securitization Bonds 1896 2.2 1697 2.1 Source: The Egyptian Exchange.

3/2/2: Secondary (Trading) Market

The trading value of bonds declined by LE 4.5 billion during

July/December 2008/2009, compared with the corresponding period a year earlier, to reach LE 6.2 billion at the end of December 2008. Transactions were only conducted on the floor, being mostly in treasury bonds (under primary dealers system). About 5.9 million bonds were traded, through 314 transactions at a value of LE 5.9 billion. In the meantime, 1.2 million corporate bonds were traded at a value of LE 57 million, through five transactions.

- 44 -

Trading in Listed Bonds on the Floor

July/Dec. 2007/2008 2008/2009

During

No. of Transactions

(Unit)

Volume of

Traded Bonds (000s)

Value of Traded Bonds (mn)

No. of Transactions

(Unit)

Volume of Traded

Bonds (000s)

Value of Traded Bonds (mn)

Total Bonds (LE) 578 10223 10630.2 23524 81658.4 6174 Treasury bonds 5 40 44 23201 74597 199 Treasury bonds (primary dealers) 545 9959 10562 314 5903 5918 Housing bonds 4 0.0 0.0 4 0.4 0.0 Corporate bonds 23 222 24 5 1158 57 Bank bonds 1 2 0.2 - - - Total Bonds (US$) - - - 9 1.3 0.1 Development bonds - - - 9 1.3 0.1 Corporate bonds - - - - - -

Source: CMA 3/3: Mutual Funds

The CMA approved the establishment of two mutual funds during

the period, thus bringing the number of mutual funds up to 43 (40 are open-ended and 3 are closed) at the end of December 2008.

- 45 -

4: Public Finance and Domestic Public Debt

4/1: Consolidated Fiscal Operations of the General Government

In July/Dec. 2008/2009, the fiscal policy reflected the government's continued efforts to alleviate the burden of price hikes on low-income brackets, by substantially increasing subsidies. Moreover, the government declared that it would pump new investments into the domestic market, ranging from LE 25 billion to LE 30 billion, within the framework of the measures taken to mitigate the adverse effects of the global financial crisis on the Egyptian economy.

Hereunder is a review of the data released by the Ministry of Finance

on the execution of the state budget for the first half of FY 2008/2009, as compared with the actual figures of the previous corresponding period.

Budget Sector

According to the follow-up of the execution of the budget in

July/Dec. 2008/2009, public revenues totaled LE 127.7 billion or 11.6 percent of GDP, with a rise of LE 63.4 billion above the previous corresponding period. Total expenditures reached about LE 163.5 billion, with a rise of LE 67.3 billion or 70.0 percent above the comparison period. Consequently, the cash deficit widened to some LE 35.8 billion. When adding the net acquisition of financial assets, the deficit rises to LE 36.1 billion, representing 3.3 percent of GDP against 3.8 percent during the period of comparison.

Expenditures,Revenues & Overall Deficit / GDP

02468

10121416

2003/2004 2004/2005 2005/2006 2006/2007 2007/2008 2008/2009

Revenues Expenditures Deficit

% in July / December

- 46 -

Contributing 43.2 percent to the total rise in public revenues, tax

revenues surged by LE 27.4 billion or 61.7 percent to LE 71.7 billion or 56.2 percent of total public revenues during the period under review. The surge stemmed mainly from the taxes on individual income and business profits, up by LE 16.6 billion (mostly from the EGPC). Moreover, revenues from taxes on goods and services as well as customs duties picked up by 46.4 percent and 22.7 percent, respectively, to LE 29.5 billion and LE 6.9 billion. In addition, grant inflows highly increased to LE 5.7 billion in the reporting period, registering nearly sevenfold their value in the period of comparison.

Ratios of Tax Revenues & Property Income / Total Revenues

01020304050607080

2005/2006 2006/2007 2007/2008 2008/2009

Tax Revenues Property Income

% July / December

Non-tax revenues edged up by LE 31.1 billion to LE 50.3 billion. More than

half of the rise came mainly from the profit surpluses transferred by the EGPC.

Public Revenues during the First Half of 2007/08 and 2008/09

2008/2009

Tax Revenues

56.2%Property Income 24.3%

Sales of Goods and

Services2.6%

Other Revenues

16.9%

2007/2008

Other Rev enues

6.2%Sales of

Goods and Serv ices

4.1%

Property Income 20.7%

Tax Rev enues

69.0%

- 47 - Expenditures sharply rose by LE 67.3 billion or 70.0 percent above

the corresponding period, totaling some LE 163.5 billion or 14.9 percent of GDP.

Expenditures during the First Half of 2007/08 and 2008/09

The bulk of the increase in expenditures (57.5 percent) was in

subsidies, which more than tripled posting LE 56.0 billion, with a rise of LE 38.7 billion during the reporting period. This reflected the increase in appropriations for the EGPC subsidies by LE 31.9 billion and for GASC subsidies by LE 8.1 billion. Nonetheless, appropriations for some other subsidies were cut down. Another factor behind the surge in expenditures was the large rise in the amounts absorbed by wages and compensations of employees (by 18.4 percent to LE 33.3 billion). This sum included all raises: basic pays of government employees (up by 30 percent), pensions (20 percent), the minimum incentive payments for local government employees (to 75 percent) and adjustments to the salaries of teachers and doctors. Hence, expenditures on wages and salaries drained about 26.1 percent of total revenues, or 20.4 percent of the current government spending. In turn, the high ratio of expenditures on salaries and wages/total expenditures lessened the prospects for narrowing the budget deficit by rationalizing the current expenditure.

Interest payments rose by 25.4 percent to LE 23.7 billion, whereas

investments scaled up by 50.2 percent to LE 14.5 billion, mostly directed to infrastructure projects, and education and health services.

2007/2008

W ages & Compensati

ons of Employees29

.3%

Other Expenditures

11.0%Purchases of Goods and

Services6.3%

Interests 19.7%

Subsidies, Grants and

Social Benefits

23.7%

Investments 10.0%

2008/2009

Subsidies, Grants and

Social Benefits44.5% Investments

8.8%

Wages & Compensation of Employees

20.4%

Other Expenditures

7.0%Purchases of Goods and

Services 4.8%

Interests 14.5%

- 48 -

The above-mentioned developments gave rise to a cash fiscal

deficit of LE 35.8 billion during July/Dec. 2008/2009. By adding the net acquisition of financial assets (LE 236 million) to the cash deficit, the overall deficit would post LE 36.1 billion or 3.3 percent of GDP, against LE 31.8 billion and 3.8 percent of GDP during the corresponding period.

Local banking sources (mainly banks' subscriptions for TBs)

provided around 64.9 percent of both overall budget deficit (LE 36.1 billion) and some miscellaneous domestic repayments of LE 39.7 billion. External borrowing covered 31.2 percent, while the remaining finance came from miscellaneous local sources (non-banking) and the privatization proceeds.

Budget Sector, NIB and SIFs Adding the fiscal operations of the NIB and SIFs to those of the

budget sector, collected revenues would reach LE 129.6 billion or 11.8 percent of GDP.

Subsidy, Wages & Paid Interest / Total Expenditures(July / Dec.)

05

10152025303540

2005/2006 2006/2007 2007/2008 2008/2009

Interests ( Domestic, Foreign)SubsidiesCompensations of Employees

%

- 49 -

Consolidated Fiscal Operations of the General Government (Budget Sector, NIB and SIFs)

(Total Revenues) (LE bn)

July/Dec. 2008/2009 (Actual) Budget Sector

Relative Structure

ExecutionRatio of the Total Estimate for the Year

Budget Sector, NIB & SIFs

Relative Structure

ExecutionRatio of the Total Estimate for the Year

Total Revenues 127.7 100.0 46.1 129.6 100.0 46.0 Tax Revenues 71.7 56.2 43.1 71.7 55.3 43.1 Taxes on income and profits 33.9 26.5 40.7 33.9 26.1 40.7

The EGPC 15.0 11.7 42.9 15.0 11.5 42.9 The SCA 5.7 4.5 47.6 5.7 4.4 47.6 The CBE 0.0 0.0 0.0 0.0 0.0 0.0 Other entities 7.0 5.5 35.8 7.0 5.4 35.8 Payable by

individuals 6.2 4.8 36.8 6.2 4.8 36.8 Taxes on property 1.0 0.8 29.3 1.0 0.8 29.3 Taxes on goods and Services 29.5 23.1 48.0 29.5 22.7 48.0 Taxes on international

Trade (customs) 6.9 5.5 45.8 6.9 5.4 45.8 Other taxes 0.4 0.3 12.5 0.4 0.3 12.5 Grants 5.7 4.4 102.0 5.7 4.4 102.0 Other Revenues 50.3 39.4 48.1 52.2 40.3 47.8 Property income 31.0 24.3 51.1 33.8 26.0 50.2 Selling proceeds of goods and services 3.2 2.6 31.4 3.2 2.6 31.4 Financial investments 1.5 1.1 436.0 1.4 1.1 436.0

Others 14.6 11.4 43.8 13.8 10.6 43.8 Source: Ministry of Finance. Percentages are calculated in terms of LE million.

On the other hand, total expenditures reached LE 164.3 billion or

15.0 percent of GDP.

- 50 -

Consolidated Fiscal Operations of the General Government (Budget Sector, NIB and SIFs)

(Total Expenditures)

(LE bn) July/Dec. 2008/2009 (Actual)

Budget Sector

Relative Structure

ExecutionRatio of the Total Estimate for the Year

Budget Sector, NIB & SIFs

Relative Structure

Execution Ratio of the Total Estimate for the Year

Total Expenditures 163.5 100.0 47.5 164.3 100.0 47.6 Wages & Compensations of Employees 33.3 20.4 42.1 33.7 20.5 42.2 Purchases of Goods & Services 7.8 4.8 32.8 7.8 4.8 32.9 Interest 23.7 14.5 44.8 17.7 10.7 40.2 Subsidies, Grants and Social Benefits 72.7 44.5 54.2 79.1 48.2 55.1

Subsidies 56.0 34.2 58.3 56.0 34.1 58.3 Grants 1.9 1.2 54.2 1.9 1.1 54.2 Social Benefits 14.7 9.0 46.2 21.2 12.9 51.1 Others 0.1 0.1 4.2 0.1 0.1 4.2

Other Expenditures 11.5 7.0 44.5 11.5 7.0 44.5 Purchases of Non-Financial Assets (Investments)

14.5

8.8

51.2

14.5

8.8

51.1

Source: Ministry of Finance. Percentages are calculated in terms of LE million.

Accordingly, the consolidated fiscal operations of the general government brought about a cash deficit of LE 34.7 billion during July/Dec. of FY 2008/2009. By adding the net acquisition of financial assets (LE 3.8 billion) to the cash deficit, the overall deficit reaches LE 38.5 billion or 3.5 percent of GDP, representing 50.1 percent of the overall deficit estimated for the whole FY.

- 51 -

Consolidated Fiscal Operations of the General Government (Budget Sector, NIB and SIFs)

(Cash and Overall Deficit/Surplus & Financing Sources) (LE bn)

July/Dec. 2008/2009 (Actual)

Budget Sector

Relative Structure

ExecutionRatio of the Total Estimate for the Year

Budget Sector, NIB & SIFs

Relative Structure

ExecutionRatio of the Total Estimate for the Year

Total Revenues 127.7 46.1 129.6 46.0 Total Expenditures 163.5 47.5 164.3 47.6

Cash deficit 35.8 53.4 34.7 54.3 Net acquisition of financial assets 0.3 8.8 3.8 29.4

Overall Deficit 36.1 51.7 38.5 50.1 Finance Sources 36.1 100.0 51.7 38.5 100.0 50.1 Domestic Finance 50.2 139.3 64.5 52.2 135.5 61.9

Banking 49.2 136.3 73.0 49.6 128.9 74.0 Non-banking 1.0 3.0 10.3 2.6 6.6 14.8

Blocked Account Used in Amortizing Part of the CBE bonds .. .. .. .. .. .. External Borrowing 23.6 65.5 -344.1 23.6 61.3 -344.1 Arrears 0.0 0.0 0.1 0.0 0.0 0.1 Others -7.5 -20.8 618.5 -7.0 -18.1 1270.2 Financing Effects for Eliminations .. .. .. .. .. .. Exchange Rate Revaluation 1.8 5.0 .. 1.8 4.7 .. Net Privatization Proceeds 0.2 0.4 13.3 0.2 0.3 13.3 Difference between Treasury Bills Face Value & Present Value -7.4 -20.6 .. -7.4 -19.3 .. Foreign Debt Reclassification Diff. and Related FX Diff. -18.3 -50.6 .. -18.3 -47.4 ..

Discrepancy -6.6 -18.2 -27312.5 -6.6 -17.0 -27312.5 Source: Ministry of Finance. Percentages are calculated in terms of LE million. .. Less than LE 1 million.

Local banking sources were heavily drawn upon to finance 63.8 percent of the overall deficit of the consolidated fiscal operations of the general government (LE 38.5 billion), along with some domestic repayments of about LE 39.2 billion. Additionally, external borrowing covered 30.4 percent of the deficit and the remaining finance came from other miscellaneous local sources (non-banking) as well as privatization proceeds.

- 52 -

4/2: Domestic Public Debt

During July/December 2008/2009, domestic public debt rose by LE 55.9 billion or 8.4 percent to LE 722.7 billion or 65.8 percent of GDP at the end of December 2008.

Domestic Debt at End of Dec. 2008

Economic Authorities Debt

55.6

NIB Debt138.2

Government Debt528.9

(LE bn)

4/2/1: Debt of the Government (Net)

The government’s net domestic debt reached about LE 528.9

billion or 48.2 percent of GDP, up by LE 50.1 billion or 10.5 percent during July/December 2008/2009. The rise was an outcome of the LE 57.4 billion pickup in the balances of government bonds and bills and the LE 7.3 billion increase in the net credit position of government balances with the banking system (as deposits rose by LE 9.6 billion and loans by LE 2.3 billion).

- 53 -

Net Domestic Debt of the Government (LE bn)

Balances at End of June 2008 Dec. 2008 Change

Value % Value % + (-)

2008/2009Government’s Net Domestic Debt 478.8 100.0 528.9 100.0 50.1 -Balances of Bonds & Bills 569.0 118.8 626.4 118.4 57.4 • Notes and bonds* 422.6 88.2 420.5 79.5 2.1

Of which, tradable on exchanges 82.5 17.2 80.0 15.1 2.5 • Treasury bills 146.4 30.6 205.9 38.9 59.5

- SIFs Credit Facilities 2.3 0.5 2.3 0.5 00 -Net Balances at the Banking System -92.5 -19.3 -99.8 -18.9 (7.3) • Facilities 28.4 5.9 30.7 5.8 2.3 • Deposits -120.9 -25.2 -130.5 -24.7 -9.6

Domestic debt of the government /GDP (%)

53.4

48.2

Source: Ministry of Finance, CBE and NIB. Ratios are calculated in terms of LE million. * Including treasury bonds; housing bonds; bonds denominated in foreign currencies with

public commercial banks; the 5 percent ratio retained from profits of corporations subject to Law No. 97 of 1983 for the purchase of government bonds; the holdings of resident financial institutions (banking system and insurance sector) of bonds floated abroad; and the SIFs bonds against transferring NIB debt to the Public Treasury.

The rise in the balance of bonds and bills (LE 57.4 billion) was an

outcome of the following: - The LE 59.5 billion rise in the outstanding balance of treasury bills

due to the increase of the issues of 91-day bills by about LE 7.7 billion, of 182-day bills by about LE 15.5 billion, and of 364-day bills by about LE 8.3 billion. Moreover, new 273-day bills were issued on the 14th of October 2008, with a value reaching LE 28.0 billion at end of December 2008. This brings the balance of these bills at the Public Treasury to LE 205.9 billion at end of December 2008.

- The LE 0.2 billion worth rise in dollar-denominated sovereign bonds floated abroad; and the LE 2.3 billion increase in bonds floated in Egyptian pound.

- The rise of LE 0.4 billion worth in foreign currency bonds at public commercial banks, due to revaluation differences.

- 54 - - The LE 5.0 billion decline in the balance of treasury bonds due to the

redemption of the nineteenth tranche on 4/10/2008 at a value of LE 2 billion and the thirteenth tranche on 7/12/2008 at a value of LE 3 billion.

Net Domestic Debt of Government

-200-100

0100200300400500600700

Dec. 2007 June 2008 Dec. 2008-5515253545556575

BondsTreasury BillsNet Government Balances with the Banking SystemRatio of Government Debt / GDP

%LE bn

4/2/2: Debt of Public Economic Authorities

Debt of public economic authorities stepped up by LE 5.5 billion,

to LE 55.6 billion at the end of December 2008. The rise resulted from the increase in their borrowing from the NIB by LE 1.4 billion, and the rise in their net borrowing from the banking system by LE 4.1 billion (due to their low deposits by LE 6.7 billion that exceeded the LE 2.6 billion fall in their loans).

4/2/3: Resources and Uses of the National

Investment Bank (NIB)

NIB resources went down by LE 354 million during July/December 2008/2009, to LE 192.7 billion at the end of December 2008. The decline was an outcome of the following factors: the decrease in the proceeds of investment certificates by LE 921 million and in US dollar development bonds by LE 24 million; the increase in the

- 55 -

accumulated interest on investment certificates (group A) by LE 504 million; and in the resources transferred from some local entities and other resources by LE 87 million. Resource uses ran as follows: LE 138.2 billion or 71.7 percent for lending to holding companies and their affiliate units, equity participations and concessional lending to different projects; LE 52.6 billion or 27.3 percent for financing the investments of public economic authorities; and LE 1.9 billion were placed as deposits with the banking system.

Domestic Public Debt Service

During the first half of FY 2008/2009, domestic public debt service

posted LE 27.1 billion, up by LE 8.4 billion, compared with the corresponding period a year earlier. The increase was an outcome of a pickup of LE 4.6 billion in interest payments to LE 21.9 billion, and of LE 3.8 billion in principal repayments to LE 5.2 billion. The ratio of debt service to GDP increased to 2.5 percent, from 2.1 percent. On the other hand, the ratio of debt service to total revenues declined from 29.0 percent to 21.2 percent.

Social insurance

funds 51.7

Dollar development

bonds & others5.4

Post office Saving account

49.3

Proceeds of investment

certificates & accumulated

interest 86.3

Resources of the NIB at End of Dec.2008

( LE bn )

Loans to holding

companies & affiliate units, concessional

lending & others138.2

Economic authorities

52.6

Deposits with the banking

system 1.9

Uses of the NIB at End of Dec. 2008

( LE bn )

- 56 -

5 : External Transactions

5/1: Foreign Exchange Market The CBE continued its efforts to contain the implications of the global financial crisis for the foreign exchange market, and to boost confidence in the efficiency of the market, following the large outflow of foreign investments in Egyptian TBs and securities. The dollar interbank market helped in dispelling dealers’ concerns about exchange rate fluctuations. Through the interbank market -launched on 23/12/2004- the banking system managed to meet all foreign currency needs. The volume of transactions in the dollar interbank market reached US$ 34.4 billion during the reporting period, up by US$ 2.2 billion or 6.8 percent during the same period a year earlier. Sales by public banks in the market reached 12.0 percent of the total volume of transactions, and their purchases 3.1 percent. Meanwhile, private banks’ sales recorded 88.0 percent and their purchases 96.9 percent.

The weighted average of the Egyptian pound interbank rate against the US dollar reached LE 5.5137 on December 31, 2008 against LE 5.3331 on June 30, 2008, with a decline of 3.3 percent in the LE value during the period. Yet, the value of the Egyptian pound appreciated by 12.7 percent against the US dollar since the initiation of the dollar interbank market up to the end of December 2008.

Volume of Dealing in Dollar Interbank Market and US Dollar Exchange Rate

-2.04.06.08.0

10.012.014.016.018.020.0

q1_0

6/07

q2_0

6/07

q3_0

6/07

q4_0

6/07

q1_0

7/08

q2_0

7/08

q3_0

7/08

q4_0

7/08

q1_0

8/09

q2_0

8/09

US$ bn

5.105.205.305.405.505.605.705.80

LE

Weighted Average Exchange Rate (End of Quarter)Volume of Trading in Interbank Market (During the Quarter)

- 57 - NIR with the CBE slightly declined by US$ 0.5 billion or 1.5

percent during the period, to reach US$ 34.1 billion at end of December 2008 (covering 7.3 months of merchandise imports). The decline was due to the repercussions of the global financial crisis. The rate of decline in Egypt’s net international reserves is considered one of the lowest rates in emerging economies (ranging between 5 - 23 percent).

Net International Reserves & Months of Merchandise Imports

05

10152025303540

Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08

(US$ bn)

56789101112

NIR NIR/Months of Merchandise Imports

Months

The CBE’s investment policy aims at distributing international

reserves among other currencies, alongside the US dollar, based on a number of determinants, particularly the structure of Egypt’s external debt and the currencies of its main trade partners.

Overall Balance July/Dec.

2.6

2.9

3.1

-0.5

2005/2006

2006/2007

2007/2008

2008/2009US$ bn

- 58 -

5/2: Balance of Payments*

During the first half of FY

2008/2009**, Egypt’s transactions with the external world realized an overall BOP deficit of about US$ 0.5 billion. This was the first deficit realized in this period since the last four years. The deficit occurred on the back of the global financial crisis that aggravated during the second quarter of the period under review. Consequently, gross international reserves declined by an equivalent amount. The deficit was an outcome of a current account deficit of US$ 2.5 billion and a net inflow of US$ 2.0 billion in the capital and financial account. 5/2/1: Trade Balance

With the openness of the Egyptian economy to external world, the

volume of foreign trade increased to US$ 41.8 billion during July/December of FY 2008/2009, up by 11.6 percent as compared with the corresponding period of the previous FY. This rate is lower than the growth rates achieved in the same period of the previous years. This indicates that the spillover effects of global financial crisis began to show up in the Egyptian economy. As such, exports increased by only 3.8 percent to US$ 13.6 billion, while imports rose by 15.8 percent to US$ 28.2 billion. Accordingly, the trade deficit widened by 29.8 percent to US$ 14.6 billion. Moreover, the ratio of merchandise export proceeds/import payments declined from 53.8 percent to 48.2 percent. ____________________________ * Compiled in accordance with the Fifth Edition of the IMF’s Balance of Payments

Manual, September 1993. ** Net errors and omissions recorded US$ 61.0 million (-) during the first half of FY

2008/2009.

- 59 -

The following chart demonstrates the total exports and imports, as well as the volume of trade during July/December from FY 2005/2006 to 2008/2009.

5/2/1/1: Commodity Structure of Exports and Imports First: Merchandise Export Proceeds

A- Exports by Degree of Processing

During July/December 2008/2009, merchandise export proceeds grew by 3.8 percent to US$ 13.6 billion compared with the corresponding period of the previous FY. Of this amount, oil exports constituted around 44.0 percent, with a slight decline of 0.7 percent, while non-oil exports accounted for 56.0 percent, up by 7.5 percent. The following chart demonstrates the distribution of merchandise exports∗ by relative importance during the period under review. ∗ Calculated on FOB basis, as their value is calculated at the customs borders of the Egyptian economy,

i.e. excluding the costs of shipment, freight and insurance. They include exports of the free zones to the rest of the world.

Merchandise Foreign Trade

0.0

10.0

20.0

30.0

40.0

50.0

2005/2006 2006/2007 2007/2008 2008/2009

Exports Imports Foreign Trade

(US$ bn)July/Dec.

- 60 -

Commodity Exports US$13.6bn

Non-oil US$ 7.6 bn

Oil US$ 6.0 bn

Natural gas

30.2%

Crude oil 27.7%

Petroleum products 42.1%

Liquefied gas

89.1%

Natural gas

10.9%

Other 5.8%

Raw materials

5.7%

Semi - finished goods 14.2%

Finished goods 74.3%

Main commodities Electric machines & appliances Fertilizers Cement. Miscellaneous edible preparations Iron & steel products.

Main commodities Cast iron. chemicals Plastic & articles thereof Animal and vegetable fats, oils & greases Leather

Main commodities Edible vegetables, roots & tubers Cotton. Fruits & nuts Iron ore

- 61 - B- Exports by Sector

A breakdown of export proceeds by sector, as displayed in the chart, showed that the public sector ranked first with 49.6 percent of total export proceeds. The group of fuel, mineral oils and products constituted the main exports of this sector, with a share of 88.9 percent of the total. The private sector ranked second with a share of 43.4 percent, exporting mainly finished goods (76.2 percent of the total). The investment sector followed with 7.0 percent and its exports were also concentrated in finished goods (77.0 percent of the total). Second: Merchandise Import Payments

A- Imports by Degree of Use

Merchandise import payments grew by 15.8 percent to record US$ 28.2 billion during July/December 2008/2009, against US$ 24.4 billion during the previous corresponding period. Intermediate goods, raw materials and investment goods accounted for 69.0 percent of total merchandise import payments; owing to the key role they play in stimulating domestic production to meet consumption and exportation needs. On the other hand, the group of consumer goods came next with 17.0 percent of the total. The following chart illustrates the distribution of merchandise imports∗ by relative importance during July/December of FY 2008/2009. ∗ Calculated on CIF basis, i.e. including the costs of shipment, freight and insurance. They include

imports of free zones from the rest of the world.

Sectoral Distribution of Exports

Public Sector49.6%

Investement Sector7.0%

Private Sector43.5%

July/Dec.2008/2009

- 62 -

Commodity Imports US$28.2 bn

Other 3.3 %

Fuel & mineral

oils 10.7 %

Consumer goods 17.0%

Raw materials 12.7%

Investment goods 23.9%

Intermediate goods 32.4%

Main commodities Iron & steel products. Chemicals. Animal and vegetable fats, oil & greases Plastic & articles thereof

Main commodities: Cranes and bulldozers & parts thereof Electric appliances for telephones & telegraph Pumps, fans & parts thereof Computers

Main commodities Crude oil Wheat Maize Iron ores

Durable goods 22.2%

Non-Durable goods 77.8%

Main commodities: Vehicles for transport of persons. Household electric-motor appliances

Main commodities Petroleum products. Coal & type thereof.

Main commodities Pharmaceuticals Miscellaneous edible preparations Ready-made clothes

- 63 - B- Imports by Sector

The sectoral distribution of import payments showed that the private sector was the main importer during the period under review, with a share of 67.8 percent of the total, particularly of intermediate and investment goods. The chief imports of this sector were iron and steel products, organic and inorganic chemicals, crude oil and products, plastics and articles thereof, car spare parts & accessories and pharmaceuticals.

Ranking second, the relative importance of the public sector fell from 32.8 percent to 23.2 percent. Its key imports were crude oil and products, animal & vegetable fats, greases & oils and products, wheat and pharmaceuticals.

As for the investment sector, its imports remained almost at the same level of the period of comparison (9.0 percent of the total). The main imports of this sector were crude oil and products; fans, pumps and parts; animal & vegetable fats, greases & oils and products; car spare parts & accessories; iron and steel products; and passenger cars. 5/2/1/2: Geographical Distribution of The Volume of Trade

The volume of Egypt’s external trade increased at a slower rate

than in the corresponding period of the previous FYs. As such, it grew by 11.6 percent to about US$ 41.8 billion, owing to low growth rates of merchandise export proceeds and import payments. This was ascribed to the financial and economic crisis that recently rocked the world, and the large volatilities in world oil and food prices.

Sectoral Distribution of Imports

Private Sector67.8%

Public Sector23.2%

Investement Sector9.0%

July/Dec.2008/2009

Services receipts Items as a percentage of Total Services

receipts Other receipts

14.6%

Investment Income10.7%

Government receipts

1.0%

Travel42.2%

Transportation31.4%

July/Dec. 2008

- 64 -

The following chart illustrates the volume of trade between Egypt and its main partners (groupings and countries) during the period under review. 5/2/2: Services Balance and Transfers

The services balance ran a higher surplus of US$ 7.5 billion,

against US$ 6.7 billion, up by 10.7 percent. This was ascribed to a rise of 6.0 percent in invisible receipts to US$ 13.6 billion and a slight increase of 0.8 percent in invisible payments to US$ 6.1 billion.

The rise in services receipts was due to the pickup in most items, particularly transportation, which increased by 16.4 percent to US$ 4.3 billion (representing 2.1 percent of GDP). This was a chief outcome of the rise of 8.1 percent in Suez Canal receipts to US$ 2.7 billion (against US$ 2.5 billion) in spite of their decline in the second quarter (October/December) of FY 2008/2009 by 13.4 percent as compared with the first quarter (July/September 2008/2009). Around 7.1 percent of this decline was ascribed to the decrease in the number of transiting ships and net tonnage owing to the global financial crisis and the risks of piracy at the Somali coast. On the other hand, about 6.3 percent of this decline was owed to the depreciation of the SDR -in terms of which Suez Canal tolls are calculated- against the US dollar.

Egypt's Volume of Trade with its partners during July/Dec.2008/2009

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

EU USA Asian countries Arab countries

Other countries 45.9%

Germany 18.4 %

Italy 15%

UK20.7%

Saudi Arabia 27.7%

UAE 27.2%

Other countries45 1%

Other countries 37.9%

Japan 18.0%

India 16.8%

China 27.3%

USA 100%

(US$ bn)

Services Payments Items as a percentage of Total Services Payments

Travel 24.9%

Transportation15.2%

Other Payments

38.0%

Investment Income11.8%

Government Payments

10.1%

July/Dec. 2008

- 65 -

Likewise, travel∗ receipts (tourism revenues) increased by 2.8 percent to about US$ 5.7 billion, representing 2.8 percent of GDP, during the period under review. It is to be noted that travel receipts contracted by 25.1 percent during the last three months of 2008, as compared with the preceding quarter (due to a 25.1 percent decline in the number of tourist nights) and by only 10.0 percent during October/December 2008/2009, as compared with the corresponding period of the previous FY. In the meantime, the average tourist spending per night remained unchanged at US$ 85.

In addition, other receipts scaled up by US$ 0.2 billion or 9.7 percent during the first half of FY 2008/2009, as a result of higher commission and agency fees; legal and consultation fees; computer services receipts, subscriptions for magazines & journals and communication services.

On the other hand, investment income receipts fell by 13.4 percent to US$ 1.5 billion, because of the decline in interest rates on deposits abroad.

Services payments stepped up by only 0.8 percent, due to the rise in most items, particularly the following:

- Transportation rose by 10.7 percent, due to the increase in the transfers abroad by foreign navigation and aviation companies and the payments of SUMED pipeline.

- Travel increased by 1.3 percent, owing to high visa card payments and pilgrimage & "omra" fees.

- "Other payments" rose by 9.9 percent, as an outcome of the increase in transfers abroad by foreign companies (oil and non-oil),

∗ Calculated on the basis of the number of tourist nights multiplied by the average tourist

spending per night.

Developments in Main Items of Service Receipts

July/Dec.

5.75.6

4.3

2.0 2.5 2.7

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2006/2007 2007/2008 2008/2009

US$ bn

Travel Suez Canal

Egyptian Workers' Remittances By Main Country July/Dec. 2008/2009

USA 28.4%

Other Countries

21.8%

Saudi Arabia 11.6%

Kuwait 18.8%

UAE 19.4%

- 66 -

and payments for communication services, foreign experts, royalties and licensing fees, computer services and magazines & journal subscriptions.

- Investment income payments, by contrast, fell by 24.9 percent, due to the decline in profit transfers of foreign companies operating in Egypt (oil and non-oil) and in interest on deposits at Egyptian banks paid to non-residents. Likewise, government expenditures rolled back by 5.2 percent.

Net unrequited transfers stepped up by US$ 0.4 billion or 9.9 percent, reaching US$ 4.6 billion and representing 2.3 percent of GDP, as an outcome of the following factors:

- Private transfers increased by 3.0 percent, primarily due to the rise of 3.3 percent in the remittances of Egyptians working abroad.

- Official transfers climbed to US$ 0.5 billion, as a result of the rise in cash donations and grants to the government.

Unrequited Transfers (US$ mn)

July/December 2007/2008 2008/2009 Change % Net Current Transfers 4228.1 4648.7 420.6 9.9 1- Official Transfers (Net) 205.7 505.3 299.6 145.6 - Inward cash grants 66.7 366.0 299.3 448.7 - Other inward grants 176.0 161.9 -14.1 -8.0 - Official outward grants (-) -37.0 -22.6 14.4 -38.9 2- Private Transfers (Net) 4022.4 4143.4 121.0 3.0 - Workers' remittances 4101.2 4236.0 134.8 3.3 - Other transfers 23.2 27.8 4.6 19.8 - Private transfers to abroad (-) -102.0 -120.4 -18.4 18.0

As a result of the above-mentioned developments, the current account revealed a deficit of US$ 2.5 billion during the first half of FY 2008/2009. This was an outcome of the rise in current payments by US$ 3.9 billion or 12.8 percent to US$ 34.3 billion, thus outpacing the rise in current receipts of US$ 1.7 billion or 5.6 percent, to US$ 31.8 billion.

- 67 - The following chart illustrates the developments in both current

receipts and payments during the period under review and the period of comparison. 5/2/3: Capital and Financial Account

The capital and financial account revealed a net inflow of US$ 2.0 billion during the first half of FY 2008/2009 (against US$ 3.2 billion during the corresponding period of the previous FY). This was an outcome of the following factors:

1. Foreign direct investment (FDI) in Egypt∗ realized a net inflow of US$ 4.0 billion (against US$ 7.8 billion), with a 48.2 percent decrease. This was a main result of the following:

• Net greenfield investments or capital increases declined by US$ 2.6 billion or 74.5 percent to reach only US$ 0.9 billion, against US$ 3.5 billion.

• Privatization proceeds from selling local companies and productive assets to foreign investors fell by US$ 1.1 billion or 80.2 percent. This was due to the fact that the second quarter of FY 2008/2009 did not witness any transactions for selling or acquiring Egyptian companies or productive assets by non-residents owing to the current global financial crisis.

• Net investments in the oil sector decreased by 5.2 percent, posting US$ 2.8 billion, against US$ 2.9 billion.

- The sectoral distribution of FDI to Egypt (with the exception of the petroleum sector) shows that investments in the manufacturing sector recorded US$ 549.5 million, finance US$ 223.5 million, and services US$ 205.2 million. Investments in the construction sector

∗ FDI represents foreign investors who own 10 percent or more of the capital of any resident economic

entity, or have an effective voice in its management. In Egypt, a foreign investor's equity participation shall be at least 10 percent of the capital of any enterprise.

Current Receipts & Payments July/Dec.

-6.0

4.0

12.8

-24.4

0.2

13.1

0.5

-28.2

-6.1

4.1

13.613.6

-35.0-30.0-25.0-20.0-15.0-10.0

-5.00.05.0

10.015.020.0

Merchandise Exports services Receipts Net Private Transfers net Official Transfers merchandise Imports Services Payments

US$ bn

2007/20082008/2009

- 68 -

reached US$ 138.7 million, real estate US$ 106.2 million, tourism US$ 98.8 million, agriculture US$ 68.6 million and finally came the communications & IT sector with US$ 9.9 million.

2. Other assets (representing the change in banks’ foreign assets and

the CBE’s non-reserve foreign assets and the counterpart of some items included in the current account) posted a net inflow of US$ 6.3 billion (a decrease in foreign assets) during the period under review, against a net outflow of US$ 2.7 billion (an increase in foreign assets) during the first half of the previous FY. Likewise, other foreign liabilities of the banking system (the CBE and banks) realized a net inflow (an increase in foreign liabilities) of about US$ 0.5 billion, against US$ 0.4 billion.

3. Portfolio investments in Egypt∗ recorded a net outflow of US$ 7.4

billion, against US$ 1.7 billion, owing to the following: - The net outflow of foreigners' transactions in Egyptian TBs

increased to about US$ 6.0 billion, (against a net inflow of US$ 0.3 billion during the period of comparison). The reason behind this is that foreign investors tended to liquidate their portfolios in emerging markets to face the liquidity crisis in major economies.

- Foreigners' transactions on the Egyptian Exchange recorded US$ 0.8 billion (outflows) during the reporting period, against USS$ 2.3 billion a year earlier.

- Net transactions of banks and Egyptian insurance companies in dollar denominated bonds and LE bonds floated abroad posted about US$ 0.5 billion (outflows)

∗ Representing foreigners' net portfolio (according to the CMA statement), and their dealings

in Egyptian bonds and notes.

Sectoral Distribution of Total FDI Inflow s July / Dec. 2008/2009

Undistributed

4.0%

Finance 3.9%

Manufacturing 9.5%

Services 3.6%

Construction 2.4%

Other 4.9%

Petroleum 71.7%

Net Foreign Inv estments in EgyptJuly/Dec.

7.2 7.8

4.0

-7.4

-1.70.1

-8.0-6.0-4.0-2.00.02.04.06.08.0

2006/2007 2007/2008 2008/2009

US$ bn

Net FDI in EgyptNet Portfolio Investment in Egypt

- 69 - 4. Medium- and long-term loans and facilities resulted in net

repayment of US$ 1.1 billion during the period under review, against US$ 0.6 billion, as an outcome of the following:

• Total repayments reached US$ 1.4 billion (against US$ 0.9

billion), due to the increase in the repayments of suppliers' medium-term facilities, bilateral and international organizations' loans.

• Total disbursements remained almost unchanged during the reporting period, recording US$ 0.3 billion.

- 70 -

5/3: International Finance

According to the international finance data, net resource flows from abroad (net inflows less interest payments and profit transfers) shifted to a net outflow of US$ 5.0 billion during July/December 2008-2009 from a net inflow of US$ 4.7 billion during the previous corresponding period.

The decline was mainly due to a fall in net resource inflows by

US$ 10.0 billion, resulting in a net outflow of US$ 4.3 billion during the period under review, against a net inflow of US$ 5.7 billion during the period of comparison. This was an outcome of a number of factors. First, net foreign investments in Egypt (direct and portfolio) went down by US$ 9.4 billion. Specifically, FDI in Egypt declined by US$ 3.7 billion, while portfolio investments continued to realize a net outflow of US$ 5.7 billion (as foreign investors liquidated their portfolios in emerging markets to face the global liquidity crunch). Second, portfolio investments abroad retreated by US$ 0.3 billion, and external borrowing showed a net repayment of only US$ 0.2 billion. Third, net official grants increased by US$ 0.3 billion and so did FDI abroad by US$ 0.8 billion.

Total interest payments and profit transfers abroad declined by

US$ 0.2 billion to US$ 0.7 billion.

Net Resources Flows during July/December

(10000)(8000)(6000)(4000)(2000)

02000400060008000

10000

2004/2005 2005/2006 2006/2007 2007/2008 2008/2009

US$ mn

Net Official grants Net Direct investment in Egypt

Net Portfolio investment in Egypt Direct investment abroad

Net Portfolio investment abroad Net External borrowing

- 71 -

Finance Resources from Abroad (Net) (US$ mn)

July/Dec. 2007/08 2008/09+

Change

Net International Finance 4720.7 (5030.1) (9750.8)A- Net Resources from Abroad 5674.5 (4313.8) (9988.3) 1- Official grants (net) 205.7 505.3 299.6 2- External borrowing (net) 241.1 (180.8) (421.9) 3- Direct investment in Egypt (net) 7769.5 4027.6 (3741.9) 4- Portfolio investment in Egypt (net) (1733.9) (7387.3) (5653.4) 5- Direct investment abroad (197.2) (1004.7) (807.5) 6- Portfolio investment abroad (net) (610.7) (273.9) 336.8B- Interest Payments and Profit Transfers (Outflows) (953.8)

(716.3) 237.5

1- Interest on external loans and facilities (307.9) (294.6) 13.3 2- Interest on non-residents’ deposits at Egyptian banks (31.7)

(18.1)

13.6

3- Profit transfers of direct investment (536.2) (255.6) 280.6 4- Profit transfers of investment in securities (78.0) (148.0) (70.0)+ Provisional 5/3/1: FDI in Egypt∗

During July/December 2008-2009, net FDI in Egypt decreased by

48.2 percent to US$ 4.0 billion (against US$ 7.8 billion during the corresponding period of the previous FY). This was an outcome of the decline in total investment inflows by 37.4 percent to US$ 5.8 billion (against US$ 9.2 billion), and also in capital repatriation by 19.5 percent to US$ 1.7 billion.

The decline in net FDI in Egypt was ascribed to low flows from the USA by US$ 1.8 billion to US$ 1.9 billion, from the EU countries by US$ 20.0 million to US$ 2.4 billion, from Arab countries by 52.0 percent to US$ 0.7 billion, and from other countries by US$ 0.9 billion to US$ 0.7 billion.

A sectoral distribution of total FDI in Egypt during July/December

2008-2009 showed that the petroleum sector accounted for 71.7 percent of total inflows (see the following table).The bulk of these flows (44.8 percent) came from the EU countries mainly the UK (24.0 percent) and

∗ FDI is the category of international investment that implies the existence of a long-term relationship, in which a direct investor owns 10 percent or more of the ordinary shares or voting power (for an incorporated enterprise) or the equivalent (for an unincorporated enterprise). Source: BOP Manual, Fifth Edition.

- 72 -

Belgium (15.4 percent). The USA accounted for 42.0 percent, the Arab countries for 8.1 percent chiefly Saudi Arabia (4.9 percent), and the other countries for 5.0 percent, mainly Switzerland (2.2 percent).

Sectoral Distribution of Total FDI in Egypt

(US$ mn) July/December

2007/2008 2008/2009 Sector

Value % Value % Total Inflows 9232.3 100.0 5775.6 100.0 Petroleum 4124.0 44.7 4142.0 71.7 Manufacturing 384.9 4.2 549.5 9.5 Finance 1568.0 17.0 223.5 3.9 Services 196.2 2.1 205.2 3.6 Construction 292.4 3.2 138.7 2.4 Real Estate 32.6 0.4 106.2 1.8 Tourism 76.1 0.8 98.8 1.7 Agriculture 2.8 0.0 68.6 1.2 Communications & IT 7.6 0.1 9.9 0.2 Undistributed 2547.7 27.6 233.2 4.0

A breakdown of FDI in Egypt by investment purpose showed that

petroleum investments ranked first as mentioned above, reaching US$ 4.1 billion during the reporting period. Greenfield investments or capital increase came next with some US$ 1.3 billion or 21.8 percent of the total, then real estate investments (about US$ 106.2 million or 1.8 percent of the total), and privatization proceeds from selling local assets to non-residents (about US$ 268.5 million or 4.7 percent of the total).

4027.6

7769.57244.6

3313.2

1839.4

-2000

0

2000

4000

6000

8000

10000

2004/2005 2005/2006 2006/2007 2007/2008 2008/2009Outflows Proceeds from selling local enitities to non-residents Petroleum sector investments Transfers for buying real estates in Egypt by non-residents Greenfield investment or capital increaseNet Foreign Direct Investment in Egypt

Net Foreign Direct Investment in Egypt during July/December

- 73 -

FDI in Egypt – by Country (US$ mn)

July/December 2007/2008 2008/2009*

Change

Flows of FDI in Egypt (Net) 7769.5 4027.6 (3741.9) Inflows 9232.3 5775.6 (3456.7) USA 3700.6 1941.0 (1759.6) EU Countries 2466.7 2446.7 (20.0)

Germany 180.7 72.8 (107.9) France 311.4 148.1 (163.3) UK 1837.2 1215.3 (621.9) Italy 6.6 12.1 5.5 Greece 64.4 80.3 15.9 Spain 0.0 1.5 1.5 The Netherlands 11.4 85.7 74.3 Belgium 0.0 777.7 777.7 Luxemburg 50.8 23.6 (27.2) Denmark 0.1 7.4 7.3 Sweden 2.6 0.0 (2.6) Austria 0.1 10.2 10.1 Poland 0.0 6.8 6.8 Others 1.4 5.2 3.8

Arab Countries 1413.0 678.4 (734.6) Saudi Arabia 74.1 296.7 222.6 UAE 170.3 201.0 30.7 Tunisia 1.3 0.3 (1.0) Kuwait 1048.5 55.8 (992.7) Lebanon 102.9 20.0 (82.9) Libya 1.3 1.4 0.1 Jordan 3.3 47.0 43.7 Bahrain 5.3 6.3 1.0 Qatar 1.8 34.2 32.4 Oman 0.3 1.6 1.3 Yemen 0.3 9.0 8.7 The Sudan 0.3 0.6 0.3 Others 3.3 4.5 1.2

Other Countries 1652.0 709.5 (942.5) Switzerland 99.4 98.8 (0.6) Japan 2.4 25.6 23.2 Canada 1.8 6.9 5.1 China 12.0 18.6 6.6 Australia 0.4 3.5 3.1 India 0.1 9.8 9.7 Turkey 10.3 30.8 20.5 Bermuda 3.1 0.0 (3.1) Norway 0.2 3.4 3.2 Hong Kong 0.0 37.1 37.1 Others 1522.3 475.0 (1047.3)

Capital Repatriation+ -1462.8 -1748.0 (285.2) * Provisional + Capital repatriation (outflows) means that a direct investor recovers his share of the capital

of an investment enterprise - in case of partial or full disposal - and transfers part, or all, of it abroad.

- 74 - 5/3/2: External Official Grants

Net transfers of official grants (cash and in-kind), as shown in the

chart below, amounted to US$ 505.3 million during July/December 2008-2009, against US$ 205.7 million during the previous corresponding period, up by US$ 299.6 million. This increase was an outcome of high cash grants, to reach US$ 366.0 million, and low merchandise grants, to post only US$ 161.9 million. Most of grant increases came from the USA, Belgium, Germany and Japan. On the other hand, outflows of official grants scaled down by US$ 14.4 million to US$ 22.6 million.

Total grant commitments scaled up by US$ 75.1 million to US$

504.7 million, due to new commitments with the US Agency for International Development, the European Commission, Italy and China.

-100

0

100

200

300

400

500

600

2005/2006 2006/2007 2007/2008 2008/2009

Cash inward grants Other inward grants Outward grants

Transfers of Official Grants during July / DecemberUS$ mn

- 75 -

Official Grants: New Commitments and Net Actual Flows

(US$ mn) New Commitments Actual Flows July/December 2007/2008 2008/2009 2007/2008 2008/2009*

Net Inflows 205.7 505.3 Inflows 429.6 504.7 242.7 527.9 USA 319.4 124.5 164.1 388.5 Japan 12.9 4.7 10.3 Germany 13.5 11.2 48.0 10.6 The Netherlands 6.4 Italy 11.6 0.2 0.2 UK 0.7 0.2 China 8.8 0.4 Canada 5.0 1.7 1.8 UAE 1.4 Kuwait 1.0 0.3 Belgium 23.1 114.2 EU Council** 27.3 European Commission*** 86.2 US Agency for International Development 247.1 Korean International Cooperation Agency (KOICA) 6.8 French Development Agency 2.1 World Bank 50.2 Islamic Development Bank 0.3 Others 0.2 Outflows -37.0 -22.6 * Provisional ** The EU Council is the juristic entity of the EU. *** The European Commission is the executive entity of the EU.

As for the sectoral distribution of grant commitments, grants for

the services sectors went up by US$ 0.1 billion to US$ 0.5 billion during July/December 2008-2009 (against US$ 0.4 billion during the corresponding period a year earlier). This was ascribed to high grant commitments for the real estate and transportation sectors. In the meantime, there was a decline in grant commitments for the general government.

- 76 -

Breakdown of Official Grant Commitments

(By Beneficiary) (US$ mn)

July/Dec. 2007/2008 % 2008/2009 % Change

Total 429.6 100.0 504.7 100.0 75.1 Productive Sectors: 83.6 19.5 44.3 8.8 (39.3) Agriculture and irrigation 20.0 4.7 2.1 0.4 (17.9) Energy & electricity 63.3 14.7 42.2 8.4 (21.1) Potable water & sanitary sewage 0.3 0.1 (0.3) Services Sectors: 346.0 80.5 460.4 91.2 114.4 Transportation, communications and information & Suez Canal 11.6 2.3 11.6 Financial intermediaries & Supporting activities 31.6 7.4 14.3 2.8 (17.3) Insurance & social solidarity 27.3 6.3 (27.3) Real estates 57.0 11.3 57.0 General government 197.4 45.9 30.7 6.1 (166.7) Education and health 89.7 20.9 91.0 18.0 1.3 Others 255.8 50.7 255.8 5/3/3: External Debt

The outstanding balance of external debt (public and private) with

all maturities, denominated in US dollar, declined by US$ 1.8 billion, to reach US$ 32.1 billion (of which the public sector accounted for 94.5 percent) at the end of December 2008, as compared with the end of June 2008. This was an outcome of two factors. First, there was a depreciation in most currencies of borrowing versus the US dollar, which led to a fall in the balance of external debt by some US$ 1.1 billion. Second, net repayments of loans and facilities amounted to US$ 0.7 billion (due to principal repayments of about US$ 1.9 billion and disbursements of some US$ 1.2 billion).

The breakdown of external debt by maturity shows that medium- and long-term debt amounted to some US$ 29.3 billion or 91.2 percent of total debt at the end of December 2008. Of this amount, US$ 18.8 billion (58.6 percent of the total) were owed to Paris Club member countries in the form of bilateral loans (rescheduled and non-rescheduled) and suppliers’ and buyers’ credit. Debt due to countries other than Paris Club members amounted to US$ 0.8 billion or 2.6 percent of the total.

- 77 -

Debts to international and regional organizations reached US$ 7.4 billion or 22.9 percent of the total at the end of December 2008 (the public sector owed 97.4 percent). The balance of Egyptian bonds and notes (holdings of non-residents) registered some US$ 2.2 billion or 6.8 percent of total external debt (including US$ 1.3 billion as guaranteed government securities, US$ 0.3 billion as dollar-denominated sovereign bonds and US$ 0.6 billion worth as LE bonds*). In addition, non-guaranteed debt of the private sector reached US$ 82.2 million or 0.3 percent of the total.

The balance of short-term debts rose to some US$ 2.8 billion or 8.8

percent (of which, 51.7 percent was owed by the public sector).

External Debt by Debtor**

A breakdown of external debt by debtor at the end of December 2008 showed that the balance of external debt owed by the other sectors decreased by US$ 5.3 billion to US$ 4.1 billion, banks by US$ 0.5 billion to US$ 2.0 billion and the CBE by US$ 80.1 million to US$ 0.2 billion. In the meantime, the balance of external debt owed by the central government rose by US$ 4.2 billion to US$ 25.8 billion. * In July 2007, LE bonds were issued abroad at a value of LE 6 billion and will fall due in

July 2012. Of this amount, some US$ 0.6 billion or the equivalent of LE 3.5 billion are owed to non-residents (external debt) and the remaining is regarded as a domestic debt.

** In September 2008, the items of “central and local government”, and “other sectors” were reclassified.

External Debt by Type End of Dec. 2008

Egyptian bonds and notes

6.8%

International & regional

organizations22.9%

Rescheduled bilateral debt

45.5%Other bilateral debt

14.7%

Suppliers' & buyers' Credit

1.0%

Private sector (Non guaranteed)

0.3% Short - term debt8.8%

- 78 - Nevertheless, these developments did not affect the structure of

external debt by debtor, as the central government continued to account for the bulk (80.4 percent) of the total debt, followed by the other sectors (12.7 percent), banks (6.2 percent) and the CBE (0.7 percent).

External Debt by Creditor

A breakdown of external debt by creditor showed that 36.6 percent

of the total was due to the EU countries; namely France (13.6 percent), and Germany (11.9 percent). In the meantime, the debt due to the USA and Japan represented 11.9 percent and 12.7 percent of the total, respectively. The debt owed to international and regional organizations registered 22.9 percent, mainly to the European Investment Bank (6.1 percent). The debt owed to the Arab countries combined posted 4.2 percent, mainly Kuwait (2.2 percent) and Saudi Arabia (0.7 percent).

External Debt by Debtor(share in total increase/decrease)

July/ December

4171.0

1759.1

(237.9) (5.1) (80.1)(321.8) (519.1)

634.3

(105.8)

30.6 553.9

(5341.4)-6000

-4000

-2000

0

2000

4000

2006/2007 2007/2008 2008/2009

(US$ mn)

Central & Local Government Monetary Authority (CBE)

Banks Other Sectors

External Debt by DebtorEnd of December

05

101520253035

200820072006

(US$ bn)

Central & Local Government Monetary Authority (CBE)BanksOther Sectors

- 79 -

External Debt by Main Currency of Borrowing1

A breakdown of external debt by main component currencies indicated that the US dollar accounted for the bulk (with a relative importance of 40.8 percent) of the total, due to outstanding obligations in US dollar to creditors other than the USA. The euro came next with 30.6 percent, the Japanese yen with 13.0 percent and the Kuwaiti dinar with 5.6 percent.

- 80 -

External Debt Indicators

The following table on main debt indicators shows a continued improvement during July/December 2008-2009 for the third consecutive year. As such, external debt /GDP retreated to 16.1 percent from 20.2

1 The structure of Egypt’s external debt by currency of borrowing is one of the key indicators

used by the CBE to determine the structure of international reserves by currency.

External Debt by CreditorEgyptian

bonds and notes6.8%

USA11.9%

International & regional

organizations22.4%

Other countries12.3%

Arab Countries4.2%

United Kingdom

3.7%

Germany11.9%

Japan12.7%

France13.6%Dec.

2008

External Debt by Major CurrenciesEnd of December 2008

Swiss franc1.8%

Egyptian Pound2.0%

Kuwaiti dinar5.6%

Japanese yen

13.0%

Euro30.6%

US dollar 40.8%

Other currencies

2.0%

SDRs4.2%

- 80- percent. Also, the 5.6 percent rise in the export proceeds of goods and services as well as transfers during the period drove up the ratio of debt service to current receipts (including transfers) from 4.2 percent to 5.4 percent and its ratio to exports of goods and services from 4.9 percent to 6.3 percent. Concurrently, the ratio of external debt to exports of goods and services dropped from 126.8 percent to 118.3 percent.

The ratio of short-term debt to total debt and to net international reserves mounted to 8.8 percent and 8.3 percent, in order, during the period under review, against 6.8 percent and 7.1 percent, during the period of comparison. External debt per capita declined to US$ 426.5 during the period under review from US$ 437.8 during the period of comparison.

Main Indicators of External Debt (%)

July/December 2006/07 2007/08 2008/09+

Debt balance*/GDP 22.2 20.2 16.1 Debt balance/exports of goods and services 140.5 126.8 118.3 Debt service/exports of goods and services 8.7 4.9 6.3 Debt service/current receipts (including transfers) 7.6 4.2 5.4 Interest payments**/exports of goods and services 1.6 1.4 1.3 Interest payments**/ current receipts (including transfers) 1.4 1.2 1.1 Short-term debt/total debt 5.9 6.8 8.8 Short-term debt/net international reserves 6.6 7.1 8.3 External debt per capita (US$) 386.0 437.8 426.5 + Provisional * The balance of external debt in LE according to the exchange rate at the end of the period. ** Including interest payments on bonds and notes held with non-residents.

As for external debt service, total payments of debt service went up

by US$ 464.1 million to US$ 1.7 billion during July/December 2008-2009, compared with the corresponding period a year earlier. Such a rise was an outcome of the increase in principal repayments by US$ 449.6 million to US$ 1.4 billion, and the step-up in interest payments by US$ 14.5 million to US$ 0.4 billion.

External Debt Indicators July/December

05

1015202530354045

2002

/2003

2003

/2004

2004

/2005

2005

/2006

2006

/2007

2007

/2008

2008

/2009

0

100

200

300

400

500

Debt Service / Current Receipts (including transfers) External Debt /GDP (at current market prices)

Short-term Debt / Net International Reserves Short-term Debt / total external debt

External Debt / Exports (G & S) (right axis) External Debt per capita (US$) (right axis)

% (%)

Annex

- 81-

Statistical Section

(1) Indicators of Development and Economic Growth

(1/1) GDP at Factor Cost by Economic Sector (at 2006/2007 Prices) (1/2) GDP by Expenditure (1/3) Consumer Price Index (Urban) (January 2007=100) (1/4) Producer Price Index (2004/2005=100) (2) Monetary Aggregates (2/1/1) CBE Financial Position: Reserve Money and Counterpart Assets (2/1/2) Banking Survey: Domestic Liquidity and Counterpart Assets (2/1/3) Banking Survey: Deposits in Local Currency (2/1/4) Banking Survey: Deposits in Foreign Currencies (2/1/5) Banking Survey: Foreign Assets and Liabilities (2/1/6) Banking Survey: Domestic Credit and Other Items (Net) (2/1/7) Total Saving Vessels (2/1/8) Bank Lending and Discount Balances to Business Sector

Financial Sector (2/2/1) Structure of the Egyptian Banking System as at 31/12/2008 (2/2/2) Local Mutual Funds Authorized and Operating as at 31/12/2008 Activity of the Banking System

Central Bank of Egypt

(2/3/1) Note Issued, Including Cash in CBE Vaults, by Denomination (2/3/2) Currency in Circulation outside CBE by Denomination (2/3/3) Activity of Clearing House

- 82 -

Banks

(2/4/1) Aggregate Financial Position (2/4/2) Deposits by Maturity (2/4/3) Deposits by Sector (2/4/4) Deposits by Economic Activity (2/4/5) Portfolio Investments by Sector (2/4/6) Lending and Discount Balances by Sector (2/4/7) Credit by Sector (2/4/8) Lending and Discount Balances by Economic Activity

Interest Rates

(2/5/1) Discount and Interest Rates on Deposits and Loans in Egyptian

Pound (2/5/2) Domestic Interest Rates on 3- Month Deposits in Major

Currencies (2/5/3) Interest Rates on Treasury Bills (Weekly Weighted Averages) (3) Non-Banking Financial Sector (3/1) Companies Listed on the Stock Exchange (3/2) Trading in Shares on the Stock Exchange (3/3) Trading in Bonds on the Stock Exchange (3/4) Foreign Transactions on the Stock Exchange (3/5) Global Depository Receipts (GDRs) (3/6) Outstanding Balance of Treasury Bills (Quarterly) (3/7) Outstanding Balance of Treasury Bills (Weekly) (3/8) Outstanding Balance of Treasury Bonds

- 83 - (4) Public Finance & Domestic Public Debt (4/1) Consolidated Fiscal Operations of the General Government (Expenditures) (4/2) Consolidated Fiscal Operations of the General Government (Revenues) (4/3) Summary of the Consolidated Fiscal Operations of the General

Government (4/4) Government Domestic Debt & Economic Authorities Debt (4/5) National Investment Bank (Resources & Uses)

(5) External Transactions

(5/1) Balance of Payments (US$) (5/2) Exports by Degree of Processing (5/3) Imports by Degree of Use (5/4) Regional Distribution of Exports and Imports (5/5) Average LE Exchange Rates against Currencies (In piasters per

foreign currency unit) (5/6) External Debt (5/7) Distribution of External Debt by Main Currencies

(LE mn)

Public Private Total Public Private Total Public Private Total

Total GDP 136810.8 241156.6 377967.4 143495.8 253240.5 396736.3 4.9 5.0 5.0Agriculture, Irrigation & Fishing 8.3 55367.6 55375.9 8.5 57084.0 57092.5 2.4 3.1 3.1

Extractions 42727.5 8758.9 51486.4 45366.6 9632.1 54998.7 6.2 10.0 6.8

Oil 18706.0 3154.0 21860.0 20102.0 3345.0 23447.0 7.5 6.1 7.3

Natural gas 23847.0 4264.0 28111.0 25086.0 4911.0 29997.0 5.2 15.2 6.7

Others 174.5 1340.9 1515.4 178.6 1376.1 1554.7 2.3 2.6 2.6

Manufacturing Industries 7719.6 51460.3 59179.9 7987.3 53869.6 61856.9 3.5 4.7 4.5Oil refining 1814.0 1374.0 3188.0 1779.0 1390.0 3169.0 -1.9 1.2 -0.6

Others 5905.6 50086.3 55991.9 6208.3 52479.6 58687.9 5.1 4.8 4.8

Electricity 4351.5 790.0 5141.5 4681.0 807.0 5488.0 7.6 2.2 6.7

Water 1256.0 0.0 1256.0 1334.0 0.0 1334.0 6.2 0.0 6.2

Construction & Building 1850.0 14953.3 16803.3 1980.1 16398.1 18378.2 7.0 9.7 9.4

Transportation & Storage 2620.0 13351.0 15971.0 2773.0 14164.9 16937.9 5.8 6.1 6.1Communications 4248.7 8167.4 12416.1 4846.2 9526.8 14373.0 14.1 16.6 15.8

Suez Canal 13528.6 0.0 13528.6 14062.9 0.0 14062.9 3.9 0.0 3.9

Wholesale & Retail Trade 1414.5 41501.4 42915.9 1484.9 43640.8 45125.7 5.0 5.2 5.1

Financial Intermediaries & Supporting Services 9697.0 5471.0 15168.0 10057.8 5669.9 15727.7 3.7 3.6 3.7Insurance 783.0 252.4 1035.4 799.6 260.6 1060.2 2.1 3.2 2.4

Social Solidarity 13022.9 0.0 13022.9 13643.0 0.0 13643.0 4.8 0.0 4.8

Restaurants & Hotels 115.6 14926.4 15042.0 122.0 15006.1 15128.1 5.5 0.5 0.6Real Estate 270.3 9849.7 10120.0 279.7 10190.7 10470.4 3.5 3.5 3.5

Real Estate Ownership 176.7 5176.3 5353.0 183.0 5342.0 5525.0 3.6 3.2 3.2

Business Services 93.6 4673.4 4767.0 96.7 4848.7 4945.4 3.3 3.8 3.7

General Government 32695.8 0.0 32695.8 33551.1 0.0 33551.1 2.6 0.0 2.6Education, Health & Personal Services 501.5 16307.2 16808.7 518.1 16989.9 17508.0 3.3 4.2 4.2

Education 0.0 4266.7 4266.7 0.0 4430.9 4430.9 0.0 3.8 3.8

Health 501.5 4741.6 5243.1 518.1 4921.5 5439.6 3.3 3.8 3.7

Others 0.0 7298.9 7298.9 0.0 7637.5 7637.5 0.0 4.6 4.6

2008/20092007/2008Growth Rate %

- 84 -

July / Dec.

Source : Ministry of Economic Development.

Sectors

(1/1) GDP at Factor Cost by Economic Sector

At 2006/2007 prices

2008/2009

(1/2) GDP by Expenditure July/December

2007/2008 2008/2009 2007/2008 2008/2009 2007/2008 2008/2009

1-GDP at Market Price(2+3+4-5) 395.0 414.6 100.0 100.0 7.0 5.0

2- Final Consumption 341.1 360.9 86.4 87.1 5.1 5.8

Final private consumption 298.0 315.7 75.4 76.2 5.6 5.9

Final government consumption 43.1 45.2 10.9 10.9 1.7 4.9

3- Gross Capital Formation 73.8 76.7 18.7 18.5 16.8 3.9

Investments 73.8 75.5 18.7 18.2 16.8 2.3

Change in stock 0.0 1.2 0.0 0.3 0.0 0.0

4- Exports of Goods & Services 134.4 132.0 34.0 31.8 26.2 -1.9

5- Imports of Goods & Services 154.3 155.0 39.1 37.4 23.0 0.5

6- Gross Domestic Saving (1-2) 53.9 53.7 13.6 13.0 21.7 -0.4

- 85 -

Source : Ministry of Economic Development.

Structure % Growth Rate % Value at LE bn

Relative Weights

June Dec. June Dec.

All Items 100.0 101.1 106.3 121.5 125.8 5.1 3.5

Food & Non-Alcoholic Beverages 43.9 102.5 108.8 130.3 132.6 6.1 1.8

Tobacco 2.5 100.0 100.0 112.1 121.0 0.0 7.9

Clothing & Footwear 7.9 100.2 101.2 104.3 114.7 1.0 10.0

Housing , Water, Electricity, Gas & Fuel 13.5 100.0 101.4 107.6 110.7 1.4 2.9

Furnishings, Household Equipment & Routine Maintenance of the House 4.2 100.4 103.1 110.7 120.8 2.7 9.1

Health Care 3.6 100.0 100.0 112.1 112.1 0.0 0.0

Transportation 5.2 100.0 100.5 120.1 123.2 0.5 2.6

Communications 3.6 100.0 100.0 104.0 109.5 0.0 5.3

Recreation & Culture 3.4 100.0 103.1 121.7 133.3 3.1 9.5

Education 4.4 100.0 137.8 137.7 144.1 37.8 4.6

Hotels & Restaurants 3.6 100.0 102.5 146.1 154.4 2.5 5.7

Miscellaneous 4.2 100.2 104.4 111.5 111.9 4.2 0.4

Source: Central Agency for Public Mobilization and Statistics (CAPMAS) (Monthly CPI Bulletin).

- 86 -

July/Dec. 2007/2008 2008/2009

(1/3) Consumer Price Index (Urban) (Jan. 2007=100)

Inflation Rate %2007 2008

Relative Weights

June Dec. June Dec.

All Items 100.0 126.0 137.2 168.5 136.8 8.9 -18.8

Agriculture, Forestry and Fishing 25.1 143.0 154.1 179.5 178.3 7.8 -0.7

Mining and Quarrying 21.8 136.8 167.7 232.3 88.1 22.6 -62.1

Manufacturing Industries 38.9 115.7 119.1 144.4 142.3 2.9 -1.5

Electricity, Gas, Steam and Air Conditioning Supply 2.3 100.0 100.0 114.0 115.0 0.0 0.9

Water Supply, Sewerage, Waste Management and Remediation Activities 2.0 128.0 128.0 138.7 138.7 0.0 0.0

Transportation and Storage 2.8 101.7 109.7 110.9 124.2 7.9 12.0

Accommodation and Food Service Activities 5.0 105.2 108.9 117.5 124.5 3.5 6.0

Information and Communication Activities 2.1 107.8 107.8 107.8 112.5 0.0 4.4

Source: Central Agency for Public Mobilization and Statistics (CAPMAS), the PPI Bulletin issued every two months.

(1/4) Producer Price Index (2004/2005 = 100)

Inflation Rate %

Groups2007 2008

July/Dec. 2007/2008 2008/2009

- 87 -

2005Dec. Jun. Dec. Jun. Dec. Jun. Dec.

Reserve Money 114168 116050 126111 134126 140826 169911 167906Currency in circulation outside CBE 73173 78604 87962 92174 103674 111412 121280Banks' deposits in local currency 40995 37446 38149 41952 37152 58499 46626

Counterpart Assets 114168 116050 126111 134126 140826 169911 167906Net Foreign Assets 54018 61302 80108 95372 107207 180333 184397Foreign Assets 122956 129477 146156 160197 172727 182021 185787

Gold 4500 6429 6429 6744 6744 8695 8695Foreign securities 21000 48353 72152 108606 118402 151175 149271Foreign currencies 97456 74695 67575 44847 47581 22151 27821

Foreign Liabilities* 68938 68175 66048 64825 65520 1688 1390Net Domestic Assets 60150 54748 46003 38754 33619 -10422 -16491Net Claims on Government 106683 114055 112470 117254 114735 81872 86147

Claims; of which: 178714 171808 179164 192192 191663 159697 158886 Government securities* 169008 164761 164761 166724 165688 123123 123123

Deposits 72031 57753 66694 74938 76928 77825 72739Net Claims on Banks -2057 1018 37665 59512 67907 77581 4169

Claims 22663 17412 55149 77270 86539 97828 24509Deposits in foreign currencies 24720 16394 17484 17758 18632 20247 20340

Other Items (Net) -44476 -60325 -104132 -138012 -149023 -169875 -106807Assets* 49997 41743 48681 39141 46232 25233 34237Liabilities 94473 102068 152813 177153 195255 195108 141044

Source : Central Bank of Egypt.* At the end of June 2008, the CBE and the government agreed on using part of the rescheduled debts -under Paris Club agreement- which are not yet due, to settle part of the government debt to the CBE.

20082006 2007

(2/1/1) CBE Financial Position: Reserve Money and Counterpart Assets (LE mn)

End of

- 88 -

2005End of Dec. Jun. Dec. Jun. Dec. Jun. Dec.

1- Domestic Liquidity 522296 560356 601309 662688 716275 766664 791378

A- Money Supply 100712 109274 121342 131290 151800 170579 174460

Currency in circulation outside the banking system 68960 74239 83054 86860 96676 104656 114036

Demand deposits in local currency 31752 35035 38288 44430 55124 65923 60424

B- Quasi-Money 421584 451082 479967 531398 564475 596085 616918

Time & saving deposits in local currency 296756 314188 330623 377424 404236 436268 453733

Demand and time & saving deposits in foreign currencies 124828 136894 149344 153974 160239 159817 163185

2- Counterpart Assets

Net foreign assets * 112777 133385 189139 218629 232658 303680 248470

Domestic credit * 473948 509532 525393 531314 567507 570953 661796

Other items (net) * -64429 -82561 -113223 -87255 -83890 -107969 -118888

- 89 -

(2/1/2) Banking Survey: Domestic Liquidity and Counterpart Assets

* Due to the agreement between the CBE and the government, as mentioned in the footnote of table (2/1/1).

2006 2007(LE mn)

2008

Source : Central Bank of Egypt.

2005

End of Dec. Jun. Dec. Jun. Dec. Jun. Dec.Total Deposits in Local Currency 328508 349223 368911 421854 459360 502191 514157

1- Demand Deposits 31752 35035 38288 44430 55124 65923 60424

Public business sector * 3315 4934 4670 6278 61120 8698 6176

Private business sector 14897 15863 17930 20681 28007 34301 31098

Household sector 13964 14831 16258 18378 21696 24003 23758

Minus: Purchased cheques & drafts 424 593 570 907 699 1079 608

2- Time and Saving Deposits 296756 314188 330623 377424 404236 436268 453733

Public business sector * 14450 15465 16395 17186 20263 20736 24000

Private business sector 27422 25580 29083 56823 71026 85415 71146

Household sector 254884 273143 285145 303415 312947 330117 358587

- 90 -

2006 2007(LE mn)

2008

(2/1/3) Banking Survey: Deposits in Local Currency

Source : Central Bank of Egypt.

* Including all public sector companies subject or not to Law No. 203 for 1991.

2005End of Dec. Jun. Dec. Jun. Dec. Jun. Dec.

Total Deposits in Foreign Currencies 124828 136894 149344 153974 160239 159817 163185

1- Demand Deposits 19195 18533 21259 26917 26876 26581 25889

Public business sector * 889 935 943 947 1833 943 2121

Private business sector 11616 10417 12518 18452 17284 17417 15667

Household sector 6827 7392 7959 7689 8009 8404 8292

Minus: Purchased cheques & drafts 137 211 161 171 250 183 191

2- Time and Saving Deposits 105633 118361 128085 127057 133363 133236 137296

Public business sector * 3984 4734 5303 5774 7050 8202 7911

Private business sector 23838 28845 35478 30641 38607 39785 43738

Household sector 77811 84782 87304 90642 87706 85249 85647

Source: Central Bank of Egypt

- 91 -

2006 2007(LE mn)

2008

(2/1/4) Banking Survey : Deposits in Foreign Currencies

* including all public sector companies subject or not to Law No. 203 for 1991.

2005End of Dec. Jun. Dec. Jun. Dec. Jun. Dec.

Net Foreign Assets 112777 133385 189139 218629 232658 303680 248470

1- Foreign Assets 201863 218982 273527 304968 321012 330770 278781

Central Bank of Egypt 122956 129477 146156 160197 172727 182021 185787

Banks 78907 89505 127371 144771 148285 148749 92994

2- Foreign Liabilities 89086 85597 84388 86339 88354 27090 30311

Central Bank of Egypt * 68938 68176 66048 64825 65520 1688 1390

Banks 20148 17421 18340 21514 22834 25402 28921

* Due to the agreement between the CBE and the government, as mentioned in the footnote of table (2/1/1).

- 92 -

2006 2007(LE mn)

2008

(2/1/5) Banking Survey: Foreign Assets and Liabilities

Source: Central Bank of Egypt

2005End of Dec. Jun. Dec. Jun. Dec. Jun. Dec.

1- Domestic Credit 473948 509532 525393 531314 567507 570953 661796

Net claims on the government (A+B-C) 151176 184131 180087 178323 193161 174005 244418

A-Securities* 278866 295974 280695 278011 297067 271788 343408

B-Credit facilities 30705 28044 38170 52151 57932 67732 67443

C-Government deposits 158395 139887 138778 151839 161838 165515 166433

Claims on public business sector ** 41756 32888 35290 24446 27643 26897 28840

Claims on private business sector 235426 239338 253085 268607 278202 291719 302158

Claims on household sector 45590 53175 56931 59938 68501 78332 86380

2- Other Items (Net) -64429 -82561 -113223 -87255 -83890 -107969 -118888

Capital accounts -99453 -102139 -106217 -114534 -122199 -135401 -143394

Net unclassified assets and liabilities 35024 19578 -7006 27279 38309 27432 24506

2006 2007(LE mn)

2008

Source: Central Bank of Egypt

- 93 -

** Including all public sector companies subject or not to law No. 203 for 1991.

(2/1/6) Banking Survey: Domestic Credit and Other Items (Net)

* Due to the agreement between the CBE and the government, as mentioned in the footnote of table (2/1/1)

2005End of Dec. Jun. Dec. Jun. Dec. Jun. Dec.

Total Saving Vessels 518792 560229 594050 655376 696176 742177 760522

Savings at the Banking System 421584 451082 479967 531398 564475 596085 616918

Time & saving deposits in local currency 296756 314188 330623 377424 404236 436268 453733

Demand and time & saving deposits in foreign currencies 124828 136894 149344 153974 160239 159817 163185

Net Sales of Investment Certificates 59780 63697 66238 68311 73400 79354 78586

Post Office Saving Deposits 37428 45450 47845 55667 58301 66738 65018

Source: Central Bank of Egypt

- 94 -

2006 2007

(LE mn)

2008

(2/1/7) Total Saving Vessels

2005End of Dec. Jun. Dec. Jun. Dec. Jun. Dec.

Total 41568 32642 35040 24188 27344 26652 28667

In Local Currency 34632 26269 27265 18097 19613 19475 20690

Agriculture - 59 39 7 7 11 4

Manufacturing 20327 16215 16660 9071 8825 9066 10810

Trade 7408 4318 4799 3986 4299 4114 3272

Services 6897 5677 5767 5033 6482 6284 6604

In Foreign Currencies 6936 6373 7775 6091 7731 7177 7977

Agriculture - - - - - - -

Manufacturing 5210 3752 3993 2611 3903 3440 3768

Trade 524 1555 863 880 716 709 810

Services 1202 1066 2919 2600 3112 3028 3399

Source: Central Bank of Egypt

(2/1/8) Bank Lending and Discount Balances to Business Sector - 95 -

2006 2007(LE mn)

2008

Public Business Sector *

* including all public sector companies subject or not to Law No. 203 for 1991.

2005End of Dec. Jun. Dec. Jun. Dec. Jun. Dec.

Total 205765 214675 225461 239312 245793 258087 272681

In Local Currency 148108 150491 156130 163292 164172 167258 177279

Agriculture 5765 4794 5083 6922 5557 5326 5392

Manufacturing 57596 55827 56461 65453 61025 62693 70083

Trade 38413 39110 38608 33487 37917 38342 40899

Services 46334 50760 55978 57430 59673 60897 60905

In Foreign Currencies 57657 64184 69331 76020 81623 90829 95402

Agriculture 804 829 533 929 1106 843 1733

Manufacturing 22467 26072 29639 34199 36248 43349 43872

Trade 11635 12337 12148 10944 12536 14599 17197

Services 22751 24946 27011 29948 31733 32038 32600

Source: Central Bank of Egypt

(2/1/8) Bank Lending and Discount Balances to Business Sector

- 96

-

2006 2007

(LE mn)

2008

Private Business Sector (Contd.)

Public Sector Banks 3

Branches 843

Commercial Banks Private & Joint Venture Banks 26

Branches 1207

Off-Shore Banks 7

Branches 77

Specialized Banks

Industrial Industrial Development Bank of Egypt 1

Branches 19

Real Estate Egyptian Arab Land Bank 1

Branches 28

Agricultural Principal Bank for Development & Agricultural Credit 1

Branches 1208of which :

Village Banks 1037Total 39 3382

* Excluding branches of Egyptian banks abroad and two banks which were established under private

laws and are not registered with the CBE : the Arab International Bank, and Nasser Social Bank.

- 97 -

Central Bank of Egypt

(2/2/1) Structure of the Egyptian Banking System As at 31 December 2008*

Fund Name Fund Manager Inception Date Par Value (LE) Size (LE

Million)

Document Value (LE) at End of Dec.

2007

Document Value (LE) at End of Dec.

2008

Cash Distributions since Date of

Inception

Total Return since Inception (%)

Open-end Balance Funds

National Bank of Egypt I El Ahly Fund Management Sep-94 10 200 49.69 29.15 3.60 227.50Banque Misr I Concord International Investments Feb-95 100 500 115.76 87.52 103.80 91.32National Bank of Egypt II El Ahly Fund Management Oct-95 100 300 105.77 72.62 125.25 97.87Export Development Bank I (Al-Khabeer) Cairo Fund Management Oct-96 100 100 124.63 60.24 38.00 -1.76Suez Canal Bank I HC Securities Dec-96 500 100 471.4 227.57 20.00 -50.49National Bank of Egypt III HC Securities Aug-05 100 200 140.28 69.69 22.75 -7.56El Watany Bank of Egypt Hermes Fund Management Aug-06 100 135 123.87 104.75 7.00 11.75National Bank of Egypt v El Ahly Fund Management May-07 10 100 11.23 7.65 0.00 -23.50Al-Masi Hermes Fund Management Apr-08 100 100 - 74.29 0.00 -25.71Suez Canal Bank II Beltone Fund Management Sep-08 10 100 - 8.8 0.00 -12.00

Open-end Equity Funds

Credit Agricole Egypt I *** Hermes Fund Management Oct-94 100 300 401.22 194.33 220.25 314.58Bank of Alexandria I Hermes Fund Management Nov-94 100 200 555.46 210.79 266.00 376.79Banque Misr II Concord International Investment Sep-95 66.67 300 96.91 55.18 58.15 69.99Banque de Caire+++ Hermes Fund Management Nov-95 10 200 138.45 64.38 0.00 543.80Credit Agricole Egypt II *** Hermes Fund Management Apr-97 100 300 201.28 92.12 82.50 74.62Egyptian Gulf Bank Hermes Fund Management May-97 100 100 480.65 192.17 197.00 289.17Banque Misr III* HC Securities Dec-97 100 138.97 698.89 317.25 70.00 287.25Shield Fund ** Concord International Investment Feb-98 50 280 143.95 86.77 46.50 166.54Misr Iran Development Bank I HC Securities Aug-98 100 100 660.44 289.85 110.00 299.85Commercial International Bank II (Istethmar) CI Asset Management Apr-06 100 600 139.87 65.31 0.00 -34.69Piraeus Bank-Egypt I Phoneix Kato Asset Management Apri-08 100 100 - 69.49 0.00 -30.51Housing & Development Bank (Al-Taameer) Prime Investments Fund Management Jun-08 100 100 - 87.65 0.00 -12.35ABC Bank Rasmala Fund Management Aug-08 100 250 - 68.71 0.00 -31.29

Open-end Fixed Income FundsAl Rabeh Fund++ Prime Investment Fund Management Feb-99 100 50 102.36 101.77 83.35 85.12Credit Agricole Egypt III *** Egyptian Fund Management Group Jun-99 1000 150 1087.48 1077.35 869.98 94.73Commercial International Bank I (Osoul) CI Asset Management Apr-05 100 1000 126.17 136.77 0.00 36.77Misr Iran Development Bank II HC Securities Jul-05 1000 500 1039.06 1043.81 246.51 29.03Bank of Alexandria II Egyptian Fund Management Group May-06 10 200 11.47 12.43 0.00 24.30National Bank of Egypt IV El Ahly Fund Management Jun-06 100 145 113.87 123.21 0.00 23.21National Societe Generale Bank (Themar) Egyptian Fund Management Group Oct-06 100 100 110.9 119.78 0.00 19.78Export Development Bank II ABN-Amro-Delta Fund Management Nov-06 100 100 109.89 118.94 0.00 18.94

Open-end Islamic Funds

Faisal Islamic Bank Hermes Fund Management Dec-04 100 50 179.38 100.06 52.00 52.06Egyptian Saudi Finance Bank Hermes Fund Management May-06 100 50 133.13 70.51 39.32 9.83Faisal Islamic Bank - CIB (Al Amman) CI Asset Management Oct-06 100 100 126.42 55.81 0.00 -44.19Banque Misr IV HC Securities Oct-06 100 200 143.07 67.76 14.00 -18.24Sanabel Fund Prime Investments Fund Management Feb-07 100 100 124.93 67.33 10.00 -22.67Egyptian Saudi Finance -National Bank of Egypt (Bashaer) El-Ahly Fund Management Feb-08 100 200 - 67.33 0.00 -32.67

Closed-end Funds

Orient Trust Egyptian Investment & Finance Co. Feb-97 1000 50 1328.81 1339.62 300.00 63.96Misr Direct Investment Fund Al Ahly Development & Investment Jul-99 1000 35 1102.70 1047.4 0.00 4.74Arab Land Direct Prime Investments Fund Management Feb-00 1000 70 903.62 698.61 113.75 -18.76

Asset Allocator Funds

Arab Misr Insurance Group Prime Investments Fund Management Aug-95 500 100 1167.05 590.27 237.00 65.45Societe Arab Int'l Banque I + Prime Investments Fund Management Jun-96 100 100 636.83 339.06 88.00 327.06Societe Arab Int'l Banque II Prime Investments Fund Management Oct-97 100 200 396.76 245.3 90.00 235.30

Source: Monthly Bulletin of the Egyptian Stock Exchange* The name of Misr Exterior Bank fund has changed to Banque Misr III Fund starting from 16/9/2004 after the merger of Misr Exterior Bank with Banque Misr. The price of issuing the document has also changed from LE 1000 to LE100 after the amendment of Article (5) of the fund's prospectus as of 27/08/2006.** The name of Misr International Bank fund has changed to Shield Fund starting from 2/4/2006 and the document has been split into a ratio of 1:2 on the same date. The par value has also changed from LE 100 to LE 50.*** The name of Egyptian American Bank Fund has changed to Credit Agricole Egypt starting from 03/09/2006.

+ The fund's document has been split into a ratio of 1: 5 and the par value has also changed from LE 500 to LE100 as of 29/03/2007.

++ The fund's name has changed to Al Rabeh Fund instead of Societe Arab Int'l Banque III.+++The price of issuing the document has also changed from LE100 to LE10 starting from 03/06/2007.

(2/2/2) Local Mutual Funds Authorized and Operating as at 31/12/2008

- 98 -

2005Dec. Jun. Dec. Jun. Dec. Jun. Dec.

Currency By Denomination 73735 79017 88920 93240 105593 112430 122442

PT 25 138 136 155 144 166 147 185

PT 50 270 241 275 240 278 252 372

LE 1 603 545 654 565 670 608 929

LE 5 1276 1121 1261 1071 1240 1169 1475

LE 10 4740 4274 4210 3470 3309 2938 3320

LE 20 9952 9226 9544 8796 8251 7394 7403

LE 50 26614 27959 30830 28152 27094 25646 24886

LE 100 30142 35515 41991 47552 51439 54987 57063

LE 200 * - - - 3250 13146 19289 26809

Source: Central Bank of Egypt

* The LE 200 note has been in circulation as of May 2007.

2006 2007(LE mn)

2008

(2/3/1) Note Issued, Including Cash in CBE Vaults, by Denomination

End of

- 99 -

2005Dec. Jun. Dec. Jun. Dec. Jun. Dec.

Total 73172 78604 87963 92175 103675 111412 121282

Subsidiary Coins & Notes* 230 236 253 259 270 275 282

PT 25 135 135 152 142 163 145 183

PT 50 261 239 267 234 272 242 365

LE 1 592 540 634 550 656 591 919

LE 5 1225 1095 1185 987 1179 1105 1432

LE 10 4626 4215 4060 3323 3189 2845 3217

LE 20 9702 9128 9271 8553 7985 7194 7221

LE 50 26454 27737 30485 27967 26785 25422 24638

LE 100 29947 35279 41656 47136 50727 54529 56636

LE 200+ - - - 3024 12449 19064 26389

Source: Central Bank of Egypt

* Issued by the Ministry of Finance

+ The LE 200 note has been in circulation as of May 2007.

2006 2007(LE mn)

2008 End of

(2/3/2) Currency in Circulation Outside CBE by Denomination- 100 -

2003/2004 2004/2005 2005/2006 2006/2007 2007/2008 2007/2008 2008/2009

1- Cairo Branch

Number of cheques (thousands) 8856 8618

Value of cheques (LE mn) 215091 231943

2- Alexandria Branch

Number of cheques (thousands) 626 593

Value of cheques (LE mn) 30652 27874

3- Port Said Branch

Number of cheques (thousands) 109 110

Value of cheques (LE mn) 2481 2606

4- All Branches*

Number of cheques (thousands) 9591 9321 9508 10480 4932 5644 5727

Value of cheques (LE mn) 248224 262423 288715 356901 161782 217345 269858

Source: Central Bank of Egypt* As of 1/1/2006, the manual Clearing Houses of Alexandria and Port-Said were cancelled, and all their activities were transferred to Cairo Automated Clearing House.

DuringJuly/December

(2/3/3) Central Bank of Egypt: Activity of Clearing House

Fiscal Year

- 101 -

2005End of Dec. Jun. Dec. Jun. Dec. Jun. Dec.

A- AssetsCash 6184 6813 7437 7705 10713 10261 10363

Securities & investments in TBs; of which: 180826 193965 195807 176098 183236 201858 268658

CBE notes 23907 21563 38053 17617 - - -

Balances with banks in Egypt 128286 121695 139241 217363 259939 278185 204857

Balances with banks abroad 63999 72554 109684 124366 121426 122792 64918

Loan and discount balances 316373 324041 343935 353746 381773 401425 429188

Other assets 54482 42494 54460 58645 62926 68790 67630

Assets =Liabilities 750150 761562 850564 937923 1020013 1083311 1045614

B- LiabilitiesCapital 24513 27112 28787 33037 33253 37295 39347

Reserves 12127 13418 12059 12552 12396 16141 15615

Provisions 49990 54950 60246 53469 64132 62314 71378

Bonds & Long-term loans 18808 17526 19891 26351 20929 22285 20197

Obligations to banks in Egypt 31406 21488 58292 82619 94306 98699 24367

Obligations to banks abroad 9898 8770 8892 10006 12161 13327 19368

Total deposits 540151 568841 591292 649953 700750 747199 767668

Other liabilities 63257 49457 71105 69936 82086 86051 87674

Source : Central Bank of Egypt

- 102 - 2006 2007

( LE mn )2008

(2/4/1) Banks : Aggregate Financial Position

2005

End of Dec. Jun. Dec. Jun. Dec. Jun. Dec.

Total Deposits 540151 568841 591292 649953 700750 747199 767668

Demand deposits 58766 62431 66382 78758 89773 100569 94413

Time & saving deposits and saving accounts 459540 479805 497683 542983 579108 612737 642134

Blocked or retained deposits 21845 26605 27227 28212 31869 33893 31121

1- Local Currency Deposits 386896 401143 410543 463320 508063 552079 565374

Demand deposits 37873 41793 43267 50365 61264 71971 66615

Time & saving deposits and saving accounts 336834 345953 353206 396352 427953 460285 480452

Blocked or retained deposits 12189 13397 14070 16603 18846 19823 18307

2- Foreign Currency Deposits 153255 167698 180749 186633 192687 195120 202294

Demand deposits 20893 20638 23115 28393 28509 28598 27798

Time & saving deposits and saving accounts 122706 133852 144477 146631 151155 152452 161682

Blocked or retained deposits 9656 13208 13157 11609 13023 14070 12814

Source : Central Bank of Egypt

- 103 -

2006 2007

( LE mn )

2008

(2/4/2) Banks : Deposits by Maturity

2005End of Dec. Jun. Dec. Jun. Dec. Jun. Dec.

Total Deposits 540151 568841 591292 649953 700750 747199 767668

Local Currency Deposits 386896 401143 410543 463320 508063 552079 565374

Government sector 56314 49422 38733 37233 44780 44789 47659

Public business sector * 17766 20399 21066 23464 26493 29434 30176

Private business sector 42319 41444 47013 77504 99295 119716 102175

Household sector 268848 287973 301403 321793 334097 354119 382345

External sector ** 1649 1905 2328 3326 3398 4021 3019

Foreign Currency Deposits 153255 167698 180749 186633 192687 195120 202294

Government sector 27072 29290 30063 30329 30644 33203 37016

Public business sector * 4873 5668 6247 6721 8884 9146 10032

Private business sector 35454 39263 47996 49093 55927 57202 59405

Household sector 84638 92174 95262 98331 95678 93653 93938

External sector** 1218 1303 1181 2159 1554 1916 1903

Source : Central Bank of Egypt

*Including all public sector companies subject or not to Law No. 203 for 1991 .

**Including counterpart deposits of USAID .

- 104 -

2006 2007( LE mn )

2008

(2/4/3) Banks : Deposits by Sector

2005End of Dec. Jun. Dec. Jun. Dec. Jun. Dec.

Total Deposits 540151 568841 591292 649953 700750 747199 767668

Local Currency Deposits 386896 401143 410543 463320 508063 552079 565374

Agriculture 2172 2215 2264 2531 4465 5673 5303

Manufacturing 19651 19903 19365 23819 28722 36169 36798

Trade 12470 12793 15633 18354 19477 23928 22023

Services 37575 38245 35939 40529 48608 59337 52512

Unclassified sectors 315028 327987 337342 378087 406791 426972 448738

Foreign Currency Deposits 153255 167698 180749 186633 192687 195120 202294

Agriculture 689 855 503 467 979 1002 997

Manufacturing 17034 18159 21683 21208 27149 26223 30744

Trade 6521 8250 11519 11824 9466 10263 9860

Services 20125 21602 23745 23216 28096 30202 28207

Unclassified sectors 108886 118832 123299 129918 126997 127430 132486

Source : Central Bank of Egypt

- 105 - 2006 2007

( LE mn )2008

(2/4/4) Banks : Deposits by Economic Activity

2005End of Dec. Jun. Dec. Jun. Dec. Jun. Dec.

Total 156919 172402 157754 158481 183236 201858 268658

In Local Currency 125353 140840 126874 125981 149267 168182 235030

Government sector 98017 115146 101209 96652 117419 135129 206425

Public business sector * 538 859 755 761 1513 1414 1331

Private business sector 26798 24835 24910 28568 30335 31609 27217

Household sector - - - - - - -

External sector - - - - - 30 57

In Foreign Currencies 31566 31562 30880 32500 33969 33676 33628

Government sector 16413 16067 14725 14636 13959 13536 13861

Public business sector * - - - - - - -

Private business sector 4668 3545 3733 3474 5042 4914 4648

Household sector - - - - - - -

External sector 10485 11950 12422 14390 14968 15226 15119

Source : Central Bank of Egypt

+ Excluding CBE notes.

*Including all public sector companies subject or not to Law No. 203 for 1991.

- 106 -

2006 2007( LE mn )

2008

(2/4/5) Banks : Portfolio Investments by Sector+

2005

End of Dec. Jun. Dec. Jun. Dec. Jun. Dec.Total 316373 324041 343935 353746 381773 401425 429188

In Local Currency 237446 238926 249017 248544 258780 267166 284982

Government sector 10683 11285 11911 10788 11024 9698 8034

Public business sector * 34632 26269 27265 18097 19613 19475 20690

Private business sector 148108 150491 156130 163292 164172 167258 177279

Household sector 43360 50158 52973 55453 63278 69838 77950

External sector 663 723 738 914 693 897 1029

In Foreign Currencies 78927 85115 94918 105202 122993 134259 144206

Government sector 10315 9712 11857 15896 20933 21460 23645

Public business sector * 6936 6373 7775 6091 7731 7177 7978

Private business sector 57657 64184 69331 76020 81623 90829 95401

Household sector 2230 3017 3957 4485 5223 8494 8430

External sector 1789 1829 1998 2710 7483 6299 8752

Source : Central Bank of Egypt

* Including all public sector companies subject or not to Law No. 203 for 1991.

- 107 -

2006 2007( LE mn )

(2/4/6) Banks : Lending and Discount Balances by Sector

2008

2005End of Dec. Jun. Dec. Jun. Dec. Jun. Dec.

Total 473292 496443 501689 512227 565009 603283 697846

In Local Currency 362799 379766 375891 374525 408047 435348 520012

Government sector 108700 126431 113120 107440 128443 144827 214459

Public business sector * 35170 27128 28020 18858 21126 20889 22021

Private business sector 174906 175326 181040 191860 194507 198867 204496

Household sector 43360 50158 52973 55453 63278 69838 77950

External sector 663 723 738 914 693 897 1086

In Foreign Currencies 110493 116677 125798 137702 156962 167935 177834

Government sector 26728 25779 26582 30532 34892 34996 37506

Public business sector * 6936 6373 7775 6091 7731 7177 7978

Private business sector 62325 67729 73064 79494 86665 95743 100049

Household sector 2230 3017 3957 4485 5223 8494 8430

External sector 12274 13779 14420 17100 22451 21525 23871

Source : Central Bank of Egypt

*Including all public sector companies subject or not to Law No. 203 for 1991.

- 108 -

2006 2007( LE mn )

2008

(2/4/7) Banks : Credit by Sector

2005

End of Dec. Jun. Dec. Jun. Dec. Jun. Dec.Total 316373 324041 343935 353746 381773 401425 429188

In Local Currency 237446 238926 249017 248544 258780 267166 284982

Agriculture 5821 4902 5188 6986 5996 5758 5829

Manufacturing 82770 77734 79603 80497 75873 76793 84558

Trade 45820 43564 43408 37477 42217 42456 44171

Services 58839 61679 66939 67035 70536 71208 71233

Unclassified sectors 44196 51047 53879 56549 64158 70951 79191

In Foreign Currencies 78927 85115 94918 105202 122993 134259 144206

Agriculture 804 829 532 929 1125 863 1753

Manufacturing 36687 38517 44793 51399 59627 67690 70637

Trade 12172 13930 13025 11837 13263 15319 18015

Services 25244 26983 30592 33842 36227 35594 36619

Unclassified sectors 4020 4856 5976 7195 12751 14793 17182

Source : Central Bank of Egypt

- 109 -

2006 2007

( LE mn )

(2/4/8) Banks : Lending and Discount Balances by Economic Activity

2008

Less than three- month

deposits

Less than six- month deposits

Less than one yeardeposits

Less than one year

loans

SimpleReturn

of increasingcertificate value

January 2006 9.00 6.40 7.40 7.60 12.60 10.50 10.00 10.50

February ,, 6.10 7.20 7.40 12.60 ,, ,, ,,

March ,, 6.20 7.20 7.50 12.60 9.50 9.00 9.50

April ,, 6.20 7.00 7.30 12.60 ,, ,, ,,

May ,, 5.90 7.00 7.20 12.60 ,, ,, ,,

June ,, 5.90 6.90 7.10 12.50 ,, ,, ,,

July ,, 5.90 6.80 7.10 12.60 ,, ,, ,,

August ,, 5.90 6.80 7.00 12.70 ,, ,, ,,

September ,, 5.90 6.80 7.00 12.60 ,, ,, ,,

October ,, 5.90 6.80 7.00 12.60 ,, ,, ,,

November ,, 6.00 6.80 7.10 12.60 ,, ,, ,,

December ,, 5.90 6.80 6.90 12.60 ,, ,, ,,

January 2007 ,, 6.10 6.80 6.90 12.60 ,, ,, ,,

February ,, 6.20 6.90 6.90 12.70 10.00 9.50 ,,

March ,, 6.20 6.90 6.90 12.70 ,, ,, ,,

April ,, 6.20 6.90 6.90 12.70 ,, ,, ,,

May ,, 6.20 6.90 6.90 12.70 ,, ,, ,,

June ,, 6.10 6.90 6.90 12.60 ,, ,, ,,

July ,, 6.10 6.90 6.90 12.60 ,, ,, ,,

August ,, 6.10 6.80 6.90 12.60 ,, ,, ,,

September ,, 6.00 6.80 6.90 12.30 ,, ,, ,,

October ,, 6.00 6.70 6.90 12.20 ,, ,, ,,

November ,, 6.00 6.70 7.00 12.20 ,, ,, ,,

December ,, 6.00 6.60 6.90 12.20 ,, ,, ,,

January 2008 ,, 6.00 6.50 6.80 12.10 ,, ,, ,,

February ,, 6.00 6.50 6.80 12.10 ,, ,, ,,

March ,, 6.00 6.50 6.90 12.20 ,, ,, ,,

April ,, 6.10 6.50 6.90 12.10 ,, ,, ,,

May ,, 6.30 6.60 7.10 12.00 ,, ,, ,,

June 10.00 6.50 6.70 7.10 12.00 ,, ,, ,,

July 10.00 6.60 6.80 7.20 12.20 ,, ,, ,,

August 11.00 6.80 7.00 7.30 12.30 ,, ,, ,,

September 11.50 6.90 7.10 7.40 12.40 ,, ,, ,,

October ,, 7.20 7.40 7.80 12.40 ,, ,, ,,

November ,, 7.30 7.50 7.90 12.50 ,, ,, ,,

December ,, 7.40 7.70 8.20 12.50 ,, ,, ,,Source: Central Bank of Egypt and the Egyptian National Post Authority

* Calculated as additional interest of 0.25% for deposits of one year maturity

(2/5/1) Discount and Interest Rates on Deposits and Loans

End of Discount Rate

- 110 -

(% Annually)

Interest rate on Post Office Saving

Deposits*

Average Interest Rate in Banks Interest Rate on Investment Certificates

in Egyptian Pound

US Dollar Sterling Pound Euro

Min. Max. Min. Max. Min. Max.January 2006 4.25 4.44 3.44 4.19 1.75 2.00

February 4.38 4.56 3.44 4.19 1.88 2.13

March 4.44 4.63 3.44 4.19 2.00 2.25

April 4.63 4.81 3.56 4.31 2.06 2.31

May 4.69 4.88 3.56 4.31 2.13 2.38

June 5.00 5.19 3.63 4.38 2.31 2.56

July 5.00 5.19 3.63 4.38 2.38 2.63

August 4.88 5.06 3.88 4.63 2.50 2.75

September 4.88 5.06 3.94 4.69 2.63 2.88

October 4.88 5.06 4.00 4.75 2.75 3.00November 4.88 5.06 4.13 4.88 2.88 3.13December 4.88 5.06 4.19 4.94 2.94 3.19

January 2007 4.88 5.06 4.50 5.25 3.00 3.25February 4.88 5.06 4.44 5.19 3.06 3.31March 4.88 5.06 4.44 5.19 3.19 3.44April 4.88 5.06 4.56 5.31 3.25 3.5May 4.88 5.06 4.69 5.44 3.38 3.63June 4.88 5.06 4.81 5.56 3.44 3.69July 4.88 5.06 4.94 5.69 3.50 3.75August 5.06 5.25 5.44 6.19 4.00 4.25September 4.69 4.88 5.19 5.94 4.00 4.25October 4.56 4.75 5.13 5.88 3.88 4.13November 4.56 4.75 5.44 6.19 4.00 4.25December 4.38 4.56 5.00 5.75 4.00 4.25

January 2008 2.75 2.94 4.44 5.19 3.63 3.88February 2.56 2.75 4.56 5.31 3.63 3.88March 2.19 2.38 4.88 5.63 3.94 4.19April 2.42 2.62 4.63 4.88 3.82 4.07May 2.14 2.34 4.61 4.86 3.86 4.11June 2.46 2.66 4.70 4.95 3.96 4.21July 2.45 2.65 4.54 4.79 3.96 4.21August 2.46 2.66 4.50 4.75 3.96 4.21September 2.86 3.06 4.81 5.06 4.05 4.30October 3.12 3.32 4.69 4.94 3.85 4.10November 1.85 2.05 2.71 2.96 2.93 3.18December 1.12 1.32 1.65 1.90 2.01 2.26

Source: National Bank of Egypt

End of

- 111 -

(2/5/2) Domestic Interest Rates on 3-Month Depositsin Major Currencies

( % Annually )

(%)

91 days 182 days 273 days 364 days

Oct. 2008The:

First week (7/10) .. 14.201 .. 14.592Second week (14/10) 13.475 13.919 14.521 14.687Third week (21/10) 12.858 13.137 13.724 13.899Fourth week (28/10) 12.762 13.308 13.257 13.211

Monthly Average 13.032 13.641 13.834 14.097

Nov. 2008

The:First week (4/11) .. .. 13.982 13.898Second week (11/11) 12.217 11.913 13.040 13.092Third week (18/11) 11.899 12.027 12.556 12.263

Fourth week (25/11) 11.901 11.980 12.272 12.071

Monthly Average 12.006 11.973 12.963 12.831

Dec. 2008The:

First week (2/12) 11.699 11.763 11.922 11.765Second week (9/12) .. .. 11.858 11.749Third week (16/12) 11.542 11.635 11.771 11.662Fourth week (23/12) 11.437 11.546 11.644 11.552 (30/12) 11.629 11.714 11.668 11.580

Monthly Average 11.577 11.665 11.773 11.662

Source : Central Bank of Egypt... No issuance during the week.

(2/5/3) Interest Rates on Treasury Bills (Weekly Weighted Averages)

- 112 -

2005Dec. Jun. Dec. Jun. Dec. Jun. Dec.

First :Companies Listed on the Official Schedules - Number of companies (in unit) 138 141 141 147 138 121 120

- Number of shares (mn) 6701 7881 8939 11450 12086 12484 14108

- Nominal value of capital (LE mn) 53046 58432 65096 73403 67001 65897 74234

- Market value of capital (LE mn) 373964 298478 438719 497319 603257 644180 266407

Second :Companies Listed on the Unofficial Schedules

- Number of companies (in unit) 585 503 449 394 296 255 252

- Number of shares (mn) 2551 2560 3145 3534 5742 7320 7849

- Nominal value of capital (LE mn) 51909 50354 53258 47387 52764 72027 76115

- Market value of capital (LE mn) 80427 78013 94657 104055 164969 169111 207179

Third :Companies Listed on the Temporary Schedule* - Number of companies (in unit) 21 12 5 3 1 1 1

- Number of shares (mn) 64 16 11 9 5 5 5

- Nominal value of capital (LE mn) 1187 379 289 282 50 50 50

- Market value of capital (LE mn) 1887 579 609 452 50 50 50

Fourth : All Companies - Number of companies (in unit) 744 656 595 544 435 377 373

- Number of shares (mn) 9316 10457 12095 14993 17833 19809 21962

- Nominal value of capital (LE mn) 106142 109165 118643 121072 119815 137974 150399

- Market value of capital (LE mn) 456278 377070 533985 601826 768276 813341 473636

Source: Monthly Bulletin of the Egyptian Stock Exchange.

* Companies which have not adjusted their statuses according to the new listing rules.

- 113 -

20072006 2008

(3/1) Companies Listed on the Stock Exchange

End of

Number of Transactions

(Unit)

Amount (Thousand)

Market Value (mn)

Number of Transactions

(Unit)

Amount (Thousand)

Market Value (mn)

In Egyptian Pound 4704750 8065942 192197 4908225 9978745 118066

Floor Transactions 4509507 5991022 167584 4613864 7962395 100174

Over the Counter Trading 195243 2074920 24613 294361 2016350 17892

In Foreign Currencies 122556 916649 2077 120162 347292 698

Floor Transactions 120009 393558 943 114880 335562 568

Over the Counter Trading 2547 523091 1134 5282 11730 130

Source : Capital Market Authority.

- 114 -

2008/20092007/2008

During July/December

(3/2) Trading in Shares on the Stock Exchange

Number of Transactions Amount Market Value Number of

Transactions Amount Market Value

(Thousand) (Thousand)

In Egyptian Pound 578 10223191 10629995 23524 81657927 6173601

Floor Transactions 578 10223191 10629995 23524 81657927 6173601

Over the Counter Trading 0 0 0 0 0 0

In US Dollar 0 0 0 9 1300 128

Floor Transactions 0 0 0 9 1300 128

Over the Counter Trading 0 0 0 0 0 0

Source : Capital Market Authority.

(Unit) - 115 -

2007/2008 2008/2009

(Unit)

During July/December

(3/3) Trading in Bonds on the Stock Exchange

Egyptian Pound US Dollar

Egyptian Pound US Dollar

Net Number of Transactions (unit) 105112 6791 -52090 -8120

Purchases 532972 23819 366952 13618

Sales 427860 17028 419042 21738

Net Volume of Securities (mn) 174 -72 -266 -69

Purchases 1253 135 1200 60

Sales 1079 207 1466 129

Net Value of Securities (mn) -4602 -132 -1391 -90

Purchases 49056 368 28643 132

Sales 53658 500 30034 222

Source : Monthly Report of the Capital Market Authority.

- 116 -

2008/2009During July/December

2007/2008

(3/4) Foreign Transactions on the Stock Exchange

(3/5) Global Depository Receipts (GDRs)

Company

Jun-08 Dec-08 Jun-08 Dec-08

Commercial International Bank/Egypt (CIB) Jul-96 Bank of New York CIB 1.00 9999 15.51 6.85 81.81 37.20Suez Cement Jul-96 Bank of New York CIB 1.00 7310 8.70 5.30 49.25 21.78

NBEPaints & Chemicals Industries (Pachin) Oct-97 Bank of New York CIB 3.00 6297 2.80 2.80 57.45 26.04EFG-Hermes Aug-98 Bank of New York CIB 0.50 4324 18.00 6.00 48.00 17.43El Ezz Steel Rebars Jun-99 Bank of New York CIB 0.33 573 32.50 32.50 80.47 9.95Holding Company for Financial Investments (Lakah Group)* Jul-99 Bank of New York CIB 0.33 35000 0.44 0.44Orascom Telecom Holding (OT)** Jul-00 Bank of New York CIB 0.20 11713 64.00 27.29 68.56 30.46Orascom Construction Industries (OCI) Aug-02 Bank of New York CIB 0.50 50 137.00 50.00 360.66 140.36Egypt Lebanon Ceramics (Lecico) Nov-04 Bank of New York CIB 1.00 8796 14.00 6.50 70.30 13.13Telecom Egypt Dec-05 Bank of New York CIB 0.20 8522 15.75 15.50 16.07 16.26Naeem Holding Feb-08 Bank of New York CIB 0.25 5625 - - 1.81 2.26Palm Hills Development May-08 Bank of New York CIB 0.20 5436 - - 17.65 6.16Source: Monthly Bulletin of the Egyptian Stock Exchange

* Last closing price was on 3 March 2005 as no trading has occurred after this date.

** The conversion ratio has changed to be 5 shares : 1 GDR, as of 12 April 2007.

- 117 -

GDRs Listed on Global Exchanges

Price ($) at end of Price (LE) at end of Volume on Offering Date

(000s)

Corporate Stocks Issuedon Egyptian Exchange

Order & Date of Offering Depository Bank Sub Custodian

Bank Conversion

Ratio

(LE mn)

End of 91 days 182 days 89 days 273 days 364 days Total2001March 6195.9 8271.3 - - 14457.4 28924.6June 5762.5 9113.9 - - 14457.4 29333.8Sept. 7687.7 8564.1 - - 14457.4 30709.2Dec. 11451.6 9502.5 - - 14457.4 35411.52002March 10864.0 10240.5 - - 14457.4 35561.9June 11183.2 14366.7 - - 14457.4 40007.3Sept. 14575.7 18411.5 - - 14457.4 47444.6Dec. 15897.1 22908.0 - - 14457.4 53262.52003March 15250.8 24259.7 - - 14457.4 53967.9June 16235.7 24625.2 - - 14457.4 55318.3Sept. 14975.2 26776.5 - - 14457.4 56209.1Dec. 6272.9 28066.3 13001.4 - 14457.4 61798.02004March 15294.0 30476.8 4081.4 - 14457.4 64309.6June 18462.7 38852.7 - - 26458.2 83773.6Sept. 11000.0 48196.3 - - 48958.2 108154.5Dec. 8600.0 45466.8 - - 66558.2 120625.02005March 0.0 34550.0 - - 82358.2 116908.2June 2750.0 23900.0 - - 98257.4 124907.4Sept. 8900.0 22350.0 - - 71725.6 102975.6Dec. 5500.0 22600.0 - - 67815.6 95915.62006March 6000.0 24100.0 - - 69015.6 99115.6June 7100.0 26500.0 - - 69543.6 103143.6Sept. 9900.0 27500.0 - - 69957.4 107357.4Dec. 8200.0 27000.0 - - 71157.4 106357.42007March 11000.0 26000.0 - - 73657.4 110657.4June 9000.0 27500.0 - - 82157.4 118657.4Sept. 8500.0 31500.0 - - 90657.4 130657.4Dec. 12000.0 33000.0 - - 100957.4 145957.42008March 10500.0 32500.0 - - 106457.0 149457.0June 6800.0 33000.0 - - 106639.1 146439.1Sept. 17000.0 42500.0 - - 105939.8 165439.9Dec. 14500.0 48500.0 - 28000 114940.0 205940.0

(3/6) Outstanding Balance of Treasury Bills (Quarterly)

Source: Central Bank of Egypt.

- 118 -

(LE mn)

91 days 182 days 273 days 364 days Total

Oct. 2008The:

First week (7/10) 16500.0 43500.0 - 106439.8 166439.9 Second week (14/10) 17000.0 44000.0 2000.0 107439.8 170439.9 Third week (21/10) 17500.0 44500.0 4000.0 107939.8 173939.9 Fourth week (28/10) 17000.0 45000.0 5500.0 108439.8 175939.9

End of month 17000.0 45000.0 5500.0 108439.8 175939.9

Nov. 2008The:

First week (4/11) 15000.0 43000.0 8000.0 108939.8 174939.9 Second week (11/11) 15000.0 43500.0 10500.0 109939.8 178939.9 Third week (18/11) 15000.0 43500.0 13000.0 110439.8 181939.9 Fourth week (25/11) 15500.0 45500.0 15500.0 110939.8 187439.9

End of month 15500.0 45500.0 15500.0 110939.8 187439.9

Dec. 2008The:

First week (2/12) 16500.0 46000.0 18000.0 111439.8 191939.9 Second week (9/12) 15000.0 46000.0 20500.0 112939.8 194439.9 Third week (16/12) 14500.0 46500.0 23000.0 113439.8 197439.9 Fourth week (23/12) 14500.0 48000.0 25500.0 114439.8 202439.9

End of month 14500.0 48500.0 28000.0 114939.8 205939.9Source: Central Bank of Egypt.

(3/7) Outstanding Balance of Treasury Bills (Weekly)- 119 -

Date of Value Interest Maturity & Issue (LE mn) Rate Due Date

Seventh Tranche 01/03/1999 2000 9.500% 10 years, 01/03/2009

Eighth Tranche 16/4/1999 2000 10.000% 10 years, 16/04/2009Bonds under the Primary Dealers System **Eleventh Tranche 26/10/2004 5000 11.500% 7 years,26/10/2011Twelveth Tranche 16/11/2004 5000 11.625% 10 years,16/11/2014 Fourteenth Tranche 18/01/2005 1000 11.400% 20 years,18/01/2025

Fifteenth Tranche 12/07/2005 2000 9.100% 5 years,12/07/2010

Sixteenth Tranche (1 ) 02/08/2005 4000 9.250% 4 years,02/08/2009

Seventeenth Tranche 16/8/2005 2000 9.350% 5 years,16/08/2010

Eighteenth Tranche (2) 20/9/2005 6000 9.100% 7 years,20/09/2012 Twentieth Tranche 18/10/2005 2000 9.100% 5 years,18/10/2010

Twenty First Tranche (3) 15/11/2005 5000 9.300% 10 years, 15/11/2015Twenty Second Tranche 03/01/2006 2000 9.050% 4 years,03/01/2010

Twenty Third Tranche (4) 24/01/2006 6000 8.850% 7 years 24/01/2013

Twenty Fifth Tranche (5) 28/02/2006 4000 8.600% 5 years,28/02/2011Twenty Sixth Tranche 02/05/2006 2000 8.950% 4 years,02/05/2010Twenty Seventh Tranche 29/05/2007 2000 9.450% 7 years,29/05/2014Twenty Eighth Tranche 25/09/2007 2000 8.450% 7 years,25/09/2014Twenty Ninth Tranche 23/10/2007 2000 8.600% 8 years,25/10/2015

Thirtieth Tranche (6) 13/11/2007 5000 8.550% 6 years,13/11/2013Thirty First Tranche 22/01/2008 3000 8.700% 8 years,22/01/2016Thirty Second Tranche 12/02/2008 1500 9.150% 10 years,12/02/2018Thirty Third Tranche 19/02/2008 3000 9.200% 6 years,19/02/2014Thirty Fourth Tranche 27/05/2008 3000 10.650% 7 years,27/05/2015Thirty Fifth Tranche 10/06/2008 2000 10.950% 8 years,10/06/2016

Total 73500Source : Central Bank of Egypt.

* Issued by Law No. 4 /1995.

** This system was put into force as of July 2004, in virtue of the Minister of Finance 's Decree No. 480 for 2002 and the provisions governing

it, issued by the Minister of Finance's Decree No. 723 for 2002, in accordance with Article (7) of Law No. 92 for 2004.

( 1 ) Increased by LE 2.0 billion, due to their re-opening on 08/11/2005 on the same conditions.

( 2 ) Increased by LE 2.0 billion, due to their re-opening on 13/12/2005 on the same conditions, and by LE 2.0 billion due to their re-opening

on 27/3/2007 on the same conditions.

the same conditions.

( 4 ) Increased by LE 2.0 billion, due to their re-opening on 17/04/2006 on the same conditions, and by LE 2.0 billion due to their re-opening on 17/4/2007 on the same conditions.

( 5 ) Increased by LE 2.0 billion, due to their re-opening on 11/12/2007 on the same conditions.

( 6 ) Increased by LE 3.0 billion, due to their re-opening on 4/3/2008 on the same conditions.

- 120 -

( 3 ) Increased by LE 2.0 billion, due to their re-opening on 13/03/2006 on the same conditions, and by LE 1.0 billion due to their re-opening on 13/6/2006 on

(3/8) Outstanding Balance of Treasury Bonds*

End of Dec. 2008

( LE mn )

Total Expenditures 343912 345437 163499 164328Compensation of Employees 79039 79822 33303 33687

Salaries and wages 54616 55330 28231 28586Social contributions 7271 7341 3312 3336Other 17152 17151 1760 1765

Purchases of Goods and Services 23833 23952 7824 7872Goods 12325 12341 3726 3732Services 8254 8322 3582 3606Other 3254 3289 516 534

Interests 52929 43919 23727 17672Foreign interests 4452 4452 1819 1819Domestic interests: 48477 39467 21908 15853

To NIB& SIFs 2087 0 10569 4514To others 46390 39467 11339 11339

Subsidies, Grants and Social Benefits 134062 143587 72704 79125Subsidies 95931 95931 55960 55960

To GASC 21477 21477 17144 17144

To petroleum 62703 62703 35809 35809

To others 11751 11751 3007 3007

Grants 3494 3494 1894 1894Social Benefits 31892 41417 14734 21155Contribution to SIFs 30277 0 13403 0

Other 1615 41417 1331 21155

Other 2745 2745 116 116

Other Expenditures 25788 25823 11480 11496Defense 21549 21549 10220 10220

Other 4239 4274 1260 1276

Purchases of Non-Financial Assets(Investments) 28261 28334 14461 14476

Fixed assets 24612 24685 13095 13096

Others 3649 3649 1366 1380

Source: The Ministry of Finance .

- 121 -

The Budget Sector

The Budget Sector, NIB

& SIFs

The Budget Sector

The Budget Sector, NIB

& SIFs

(4/1) Consolidated Fiscal Operations of the General Government ( The Budget Sector, NIB and SIFs )

6 Months (Actual)

(Total Expenditures)

Estimates

2008/2009

( LE mn )

Total Revenues 276795 281560 127679 129637Tax Revenues 166569 166569 71715 71715Taxes on income, Profits 83321 83321 33873 33873

From EGPC 34934 34934 14992 14992From SCA 12060 12060 5741 5741From CBE 135 135 0 0From other units 19400 19400 6953 6953Payable by individuals 16792 16792 6187 6187

Taxes on Property 3517 3517 1029 1029Taxes on Goods and Services 61349 61349 29470 29470Taxes on International Trade 15150 15150 6938 6938Other Taxes 3232 3232 405 405Grants 5557 5557 5666 5666

Current 4329 4329 5558 5558

Capital 1228 1228 108 108Other Revenues 104669 109434 50298 52256Property Income 60782 67229 31046 33768

From EGPC 22169 22169 17063 17063From SCA 15996 15996 7668 7668From CBE 1200 1200 0 0From economic authorities 2179 2179 1132 1132From companies 4531 4671 830 830Other (TML)* 3237 3237 612 612Other 11470 17777 3741 6463

Sales of Goods and Services 10326 10326 3239 3239Financing Investment 2221 2221 1443 1443 Other 31340 29658 14570 13806Source : The Ministry of Finance .

2008/2009

The Budget Sector, NIB

& SIFs

The Budget Sector

* third mobile license

- 122 -

The Budget Sector, NIB

& SIFs

The Budget Sector

Estimates

(4/2) Consolidated Fiscal Operations of the General Government ( The Budget Sector, NIB and SIFs )

6 Months (Actual)

(Total Revenues)

( LE mn )

Total Revenues 276795 281560 127679 129637Total Expenditures 343912 345437 163500 164329Cash Deficit 67117 63877 35821 34692Net Acquisition of Financial Assets 2675 13005 236 3820Overall Fiscal Balance Finance 69792 76882 36057 38512Financing Sources 69792 76882 36057 38512Domestic Financing 77847 84273 50238 52172Banking Financing 67347 67097 49161 49623

Central Bank 26347 26347 1140 1140Other Banks 41000 40750 48021 48483

Non-Banking Financing 10500 17176 1077 2549NIB 200 0 3014 0SIFs 2500 0 -627 0Other 7800 7800 1225 1225NIB Borrowing 0 9376 0 3859Special Accounts for Economic Authorities 0 0 -2535 -2535

Foreign Borrowing 0 0 23625 23625Arrears -6865 -6865 -1 -1Others, of which: -1000 -1000 -7508 -6986

Special Accounts for Budget Entities -1214 -550 0 0Financing Effects for Eliminations 0 0 0 0Exchange Rate Revaluation 0 0 1789 1789Net Privatization Proceeds 1000 1000 133 133

Privatization Proceeds 10000 10000 133 133Treasury Contribution to the Fund 9000 9000 0 0

Difference between Treasury Bills Face Value & Present Value 0 0 -7414 -7414

Foreign Debt Reclassification diff. & FX diff. Related to it 0 0 -18251 -18251

Discrepancy 24 24 -6554 -6555Cash Deficit (surplus) as a percentage of GDP 6.7% 6.3% 3.3% 3.2%Overall fiscal balance as a percentage of GDP 6.9% 7.6% 3.3% 3.5%Revenues as a percentage of GDP 27.5% 27.9% 11.6% 11.8%Expenditures as a percentage of GDP 34.1% 34.3% 14.9% 15.0%Source : The Ministry of Finance .

Estimates

The Budget Sector, NIB

& SIFs

The Budget Sector

The Budget Sector, NIB

& SIFs

The Budget Sector

- 123 -

(4/3) Summary of Consolidated Fiscal Operations of the General Government ( The Budget Sector , NIB and SIFs )

6 Months (Actual)

2008/2009

(LE mn)

End ofChange +(-)

Value % Value % 2008/2009

Total Domestic Debt 55872

Government Domestic Debt 478811 100.0 528944 100.0 50133 - Balances of Bonds & Bills 568960 118.8 626401 118.4 57441

- Treasury bonds*, of which : 208740 43.6 206293 39.0 (2447)

Local currency bonds with public sector banks 4000 0.8 4000 0.8 -

Bonds offered abroad :

US$ 3750 0.8 3952 0.7 202

LE 112 0.0 2463 0.5 2351

- Government notes to compensate for the actuarial deficit in social insurance funds 2000 0.4 2000 0.4 -

- Housing bonds 117 0.0 116 0.0 (1)

- Treasury bills 146439 30.6 205940 38.9 59501

- Foreign currency bonds with public sector commercial banks 11126 2.3 11504 2.2 378

- The equivalent of the retained 5% of corporate profits to purchase government bonds 1636 0.3 1646 0.3 10

- Bonds of the insurance funds (against the transfer of NIB debt to the Treasury) 198902 41.6 198902 41.6 0

- Credit Facilities from the Social Insurance Funds 2343 0.5 2343 0.5 0

- Net Government Balances with the Banking System -92492 -19.3 -99800 -18.9 (7308)

Economic Authorities Debt 50123 100.0 55600 100.0 5477

- Net balances with the banking system -1156 -2.3 2953 5.3 4109

- Borrowing from NIB 51279 102.3 52647 94.7 1368

* Including public treasury bonds with the CBE, Egyptian treasury bonds, LE treasury bonds with public sector banks and bonds floated abroad

in US$ and Egyptian pound (holdings of resident financial institutions in Egypt represented in the banking system and the insurance sector).

Source: The Ministry of Finance, Central Bank of Egypt & National Investment Bank.

- 124 -

(4/4) Government Domestic Debt & Economic Authorities Debt

Dec. 2008 June 2008

666835 722707

(LE mn)

End of Change +(-)

Value % Value % 2008/2009

Resources: 193071 100.0 192717 100.0 (354). Social Insurance Fund for Gov. Employees 29076 15.1 29076 15.1 0

. Social Insurance Fund for Pub. & Priv. Business Sectors Employees 22632 11.8 22632 11.7 0

. Proceeds from investment certificates 79232 40.9 78311 40.6 (921)

. Accumulated interest on investment certificates (category A) 7509 3.9 8013 4.2 504

. Proceeds from US dollar development bonds 152 0.1 128 0.1 (24)

. Post office savings 49255 25.5 49255 25.6 0

. Others * 5215 2.7 5302 2.8 87

Uses: 193071 100.0 192717 100.0 (354). Government 0 0.0 0 0.0 0

. Economic authorities 51279 26.6 52647 27.3 1368

. Holding companies, entities & concessional loans, and others 137901 71.4 138163 71.7 262)

. NIB balances with the banking system 3891 2.0 1907 1.0 (1984)

* Including deposits of the private insurance funds, saving certificates, and loans & deposits of various entities.

- 125 -

June 2008 Dec. 2008

(4/5) National Investment Bank

(Resources & Uses)

(US$ mn)

Change

Value % Value % (-)

Balance of Current Account (293.7) (2512.6) (2218.9)

Balance of Current Account (Excluding Transfers) (4521.8) (7161.3) (2639.5)

Receipts 25896.3 100.0 27155.8 100.0 1259.5

Export proceeds** 13103.1 50.6 13596.3 50.1 493.2

Transportation, of which 3652.5 14.1 4252.8 15.7 600.3

Suez Canal dues (2511.3) (9.7) (2715.4) (10.0) 204.1

Travel 5580.4 21.5 5738.8 21.1 158.4

Investment income 1675.2 6.5 1451.2 5.3 (224.0)

Government receipts 77.5 0.3 133.5 0.5 56.0

Other receipts 1807.6 7.0 1983.2 7.3 175.6

Payments 30418.1 100.0 34317.1 100.0 3899.0

Import payments** 24372.0 80.1 28223.8 82.2 3851.8

Transportation 834.5 2.7 923.8 2.7 89.3

Travel 1497.2 4.9 1517.2 4.4 20.0

Investment income, of which 953.8 3.2 716.3 2.1 (237.5)

Interest paid (339.6) (1.1) (312.7) (0.9) (26.9)

Government expenditures 650.1 2.2 616.2 1.8 (33.9)

Other payments 2110.5 6.9 2319.8 6.8 209.3

Transfers 4228.1 100.0 4648.7 100.0 420.6

Private (net) 4022.4 95.1 4143.4 89.1 121.0

Official (net) 205.7 4.9 505.3 10.9 299.6

*Preliminary figures.

**Including the exports & imports of free zones.

- 126 -

(5/1) Balance of Payments

2007/2008* 2008/2009*

July/Dec.

(US$ mn)

2007/2008* 2008/2009*Value Value

Capital & Financial Account 3150.2 2026.8

Capital Account 2.6 -0.2Financial Account 3147.6 2027.0 Direct Investment Abroad -197.2 -1004.7 Direct Investment in Egypt (Net) 7769.5 4027.6 Portfolio Investments Abroad (Net) -610.7 -273.9 Portfolio Investments in Egypt (Net), of which : -1733.9 -7387.3 Bonds 918.8 -616.8

Other Investments (Net) -2080.1 6665.3 Net Borrowing 241.1 -180.8 Medium -and Long -Term Loans -517.1 -611.5

Drawings 282.5 299.3

Repayments -799.6 -910.8

Medium-Term Suppliers' and Buyers' Credit -103.5 -447.3

Drawings 6.2 0.8

Repayments -109.7 -448.1

Short-Term Suppliers' and Buyers' Credit (Net) 861.7 878.0 Other Assets -2692.2 6342.8 CBE -31.8 33.3

Banks -1481.0 11127.6

Other -1179.4 -4818.1

Other Liabilities 371.0 503.3 CBE 5.9 20.5

Banks 365.1 482.8

Net Errors & Omissions 230.0 -61.0Overall Balance 3086.5 -546.8Change in Reserve Assets at CBE Increase (-) -3086.5 546.8* Preliminary figures.

- 127 -

(5/1) Balance of Payments (Contd.)

July/Dec.

(US$ mn)

Value % Value % Total *** 13103.1 100.0 13596.3 100.0 493.2Fuels , Mineral Oils & Products 6166.4 47.1 6209.4 45.7 43.0Crude oil 2104.9 16.1 1659.0 12.2 (445.9)

Petroleum products **** 3916.6 29.9 4321.8 31.8 405.2

Coal & types thereof 68.4 0.5 52.5 0.4 (15.9)

Other 76.5 0.6 176.1 1.3 99.6

Raw Materials 469.7 3.6 436.0 3.2 (33.7)Cotton 71.9 0.5 58.1 0.4 (13.8)

Potatoes 22.5 0.2 2.3 0.0 (20.2)

Edible fruits & nuts 32.8 0.3 20.2 0.1 (12.6)

Oil seeds & oleaginous fruits, medicinal plants & plants for 32.5 0.2 14.6 0.1 (17.9)Iron, ore 8.6 0.1 19.0 0.2 10.4

Citrus fruits 12.2 0.1 7.1 0.1 (5.1)

Raw hides & tanned leather 18.2 0.1 16.2 0.1 (2.0)

Flax, raw 1.8 0.0 1.0 0.0 (0.8)

Edible vegetables roots & tubers 112.6 0.9 90.9 0.7 (21.7)

Other 156.6 1.2 206.6 1.5 50.0

Semi-finished Goods 880.2 6.7 1077.3 7.9 197.1Carbon 38.4 0.3 31.9 0.2 (6.5)

Essential oils & resins 2.2 0.0 2.3 0.0 0.1

- 128 -(5/2) Exports by Degree of Processing *

July/Dec.Change(-) 2008/2009**2007/2008

(US$ mn)

Value % Value % Cotton yarn 52.9 0.4 40.8 0.3 (12.1)

Aluminium, unalloyed 43.6 0.3 44.0 0.3 0.4

Animal & vegetable fats, greases & oils & products 26.8 0.2 78.3 0.6 51.5

Black honey & molasses 6.2 0.0 0.8 0.0 (5.4)

Organic & inorganic chemicals 218.2 1.7 246.2 1.8 28.0

Cast iron & semi-finished products & rolled iron 347.3 2.7 432.8 3.2 85.5

Leather, tanned 25.6 0.2 66.3 0.5 40.7

Tanning or dyeing extracts 48.4 0.4 30.4 0.2 (18.0)

Plastic & articles thereof 65.9 0.5 96.4 0.7 30.5

Other 4.7 0.0 7.1 0.1 2.4

Finished Goods 5213.1 39.8 5657.2 41.6 444.1Milk & condensed cream 11.0 0.1 48.5 0.4 37.5

Dried onion 3.3 0.0 1.7 0.0 (1.6)

Rice 79.6 0.6 27.1 0.2 (52.5)

Vegetable & fruit preparations 16.8 0.1 13.4 0.1 (3.4)

Miscellaneous edible preparations 250.8 1.9 303.2 2.2 52.4

Manufactured tobacco and tobacco substitutes 22.7 0.2 68.5 0.5 45.8

Sugar and its products 9.8 0.1 47.0 0.4 37.2

Pharmaceuticals 283.2 2.2 238.7 1.8 (44.5)

Fertilizers 137.5 1.0 477.2 3.5 339.7

Cement 405.6 3.1 371.9 2.7 (33.7)

- 129 -

(5/2) Exports by Degree of Processing * (Contd.)

July/Dec.Change(-) 2007/2008 2008/2009**

(US$ mn)

Value % Value % Extracts of essential oils & resins 49.0 0.4 18.8 0.1 (30.2)

Leather products 12.3 0.1 6.0 0.1 (6.3)

Rubber & articles 32.3 0.2 2.9 0.0 (29.4)

Paper, cardboard paper & articles thereof 97.1 0.7 90.6 0.7 (6.5)

Ceramic products 87.3 0.7 98.2 0.7 10.9

Cars, bicycles & tractors 196.1 1.5 163.3 1.2 (32.8)

Cotton textiles 157.3 1.2 276.1 2.0 118.8

Carpets & other floor coverings 73.8 0.6 58.4 0.4 (15.4)

Shoes & accessories 0.3 0.0 0.3 0.0 0.0

Ready-made clothes 222.5 1.7 284.5 2.1 62.0

Glass & glassware 109.6 0.8 131.7 1.0 22.1

Copper & articles 37.1 0.3 65.7 0.5 28.6

Aluminium articles 242.3 1.8 176.3 1.3 (66.0)

Articles of iron and steel 329.5 2.5 280.6 2.1 (48.9)

Wood & articles thereof and charcoal 7.6 0.1 10.0 0.1 2.4

Marble & granite 34.3 0.3 44.4 0.3 10.1

Articles of base metals 288.1 2.2 166.4 1.2 (121.7)Optical appliances 12.0 0.1 15.9 0.1 3.9Electric machines & appliances, recorders & T.V sets and their accessories 324.3 2.5 602.1 4.4 277.8Other 1680.0 12.8 1567.8 11.5 (112.2)

Miscellaneous Goods (Undistributed) 373.7 2.8 216.4 1.6 (157.3)

Source: Central Bank of Egypt* According to the Harmonized System** Provisional*** Include exports of free zones. **** Include natural gas, and bunker & jet fuel.

- 130 -

(5/2) Exports by Degree of Processing * (Contd.)

July/Dec.Change(-) 2007/2008 2008/2009 **

(US$ mn)

Value % Value % Total *** 24372.0 100.0 28223.8 100.0 3851.8Fuels, Mineral Oils & Products 2333.7 9.6 3033.4 10.7 699.7Petroleum products **** 2023.8 8.3 2535.8 9.0 512.0Coal & types thereof 34.2 0.2 129.2 0.4 95.0Other 275.7 1.1 368.4 1.3 92.7

Raw Materials 4571.4 18.8 3578.4 12.7 (993.0)Crude oil 2284.4 9.4 1439.6 5.1 (844.8)Wheat 844.5 3.5 655.5 2.3 (189.0)Maize 346.4 1.4 277.7 1.0 (68.7)Tobacco 122.4 0.5 169.6 0.6 47.2Metal ores 371.0 1.5 212.3 0.8 (158.7)Iron, ore 76.7 0.3 233.1 0.8 156.4Seeds & oleaginous seeds 112.1 0.5 137.0 0.5 24.9Cotton 33.6 0.1 63.4 0.2 29.8Other 380.3 1.6 390.2 1.4 9.9

Intermediate Goods 6547.1 26.9 9148.9 32.4 2601.8Sugar, raw 93.8 0.4 135.7 0.5 41.9

Animal and vegetable fats, greases & oils and products 461.0 1.9 981.1 3.5 520.1Cement 219.9 0.9 220.2 0.8 0.3Organic & inorganic chemicals 1076.3 4.4 1216.9 4.3 140.6Fertilizers 36.4 0.2 105.6 0.4 69.2Tanning & dyeing extracts 104.0 0.4 157.4 0.5 53.4Essential oils & resinoids 18.9 0.1 33.9 0.1 15.0Plastic & articles thereof 613.2 2.5 644.3 2.3 31.1

2007/2008 2008/2009**

- 131 -

(5/3) Imports by Degree of Use *

July/Dec.

Change(-)

(US$ mn)

Value % Value % Wood & articles thereof 403.8 1.7 462.5 1.6 58.7Paper, cardboard paper & articles thereof 449.7 1.8 421.7 1.5 (28.0)Cotton textiles 84.0 0.4 93.6 0.3 9.6Synthetic fibers 154.0 0.6 215.3 0.8 61.3Ceramic products 148.5 0.6 186.0 0.7 37.5Glass & articles 63.0 0.3 96.1 0.3 33.1Iron & steel products 1429.9 5.9 2361.6 8.4 931.7Copper & articles 126.9 0.5 170.7 0.6 43.8Rubber & articles 130.9 0.5 205.6 0.7 74.7Aluminium & articles 213.9 0.9 175.4 0.6 (38.5)Articles of base metals 100.6 0.4 140.9 0.5 40.3Other 618.4 2.5 1124.4 4.0 506.0

Investment Goods 5621.2 23.1 6739.7 23.9 1118.5Pumps, fans & parts thereof 281.3 1.1 408.8 1.4 127.5

Machines and apparatus for ginning and spinning & parts thereof 31.9 0.1 36.7 0.1 4.8Computers 278.2 1.1 354.0 1.3 75.8

Motors, generators, transformers & parts thereof 208.2 0.9 140.6 0.5 (67.6)

Parts of railway and tramway locomotives or rolling stock equipment 30.9 0.1 86.0 0.3 55.1Tractors 28.3 0.1 40.9 0.1 12.6Vehicles for transport of passengers 14.6 0.1 6.6 0.0 (8.0)Vehicles for transport of goods 24.4 0.1 51.3 0.2 26.9Parts & accessories of motor vehicles 649.6 2.7 794.9 2.8 145.3

(5/3) Imports by Degree of Use* (Contd.) - 132 -

2007/2008 2008/2009**

July/Dec.

Change(-)

(US$ mn)

Value % Value % Tools, implements, cuttery & spoons 94.1 0.4 95.4 0.3 1.3Air conditioners 86.2 0.4 133.5 0.5 47.3Cranes and bulldozers & parts thereof 490.7 2.0 748.4 2.7 257.7Agricultural machinery 38.8 0.2 131.2 0.5 92.4Printing machinery & parts 30.2 0.1 37.5 0.1 7.3Electric appliances for telephones & telegraph 430.7 1.8 497.3 1.8 66.6Optical appliances 187.0 0.8 211.3 0.8 24.3Other 2716.1 11.1 2965.3 10.5 249.2

Consumer Goods 3989.6 16.2 4778.0 17.0 788.4A - Durable Goods 1082.4 4.3 1061.9 3.8 (20.5)Household refrigerators & electric freezers 66.8 0.2 79.7 0.3 12.9Televisions & parts thereof 31.7 0.1 23.3 0.1 (8.4)Vehicles for transport of persons 505.8 2.1 560.1 2.0 54.3Household electric-motor appliances 144.1 0.6 172.5 0.6 28.4Other 334.0 1.3 226.3 0.8 (107.7)

B - Non-durable Goods 2907.2 11.9 3716.1 13.2 808.9Meat and edible offals 268.2 1.1 289.1 1.0 20.9Fish, crustaceans, molluscs and others 71.7 0.3 97.5 0.4 25.8Dairy products, eggs, poultry and honey 129.9 0.5 203.2 0.7 73.3Edible vegetables roots & tubers 71.0 0.3 102.6 0.4 31.6Tea 95.3 0.4 90.4 0.3 (4.9)

- 133 -

July/Dec.

2007/2008 2008/2009**

(5/3) Imports by Degree of Use* (Contd.)

Change(-)

(US$ mn)

Value % Value %Miscellaneous edible preparations 320.2 1.3 321.4 1.1 1.2

Pharmaceuticals 664.4 2.7 783.7 2.8 119.3

Insecticides 11.0 0.0 14.8 0.1 3.8

Residues of foodstuff industries & animal fodder 114.5 0.5 86.7 0.3 (27.8)

Live animals 16.7 0.1 9.5 0.0 (7.2)

Ready-made clothes 356.5 1.5 315.5 1.1 (41.0)

Cotton textiles 76.3 0.3 131.2 0.5 54.9

Sugar, refined and products 29.6 0.1 57.1 0.2 27.5

Lentils 22.6 0.1 23.2 0.1 0.6

Soap, detergents & artificial wax 76.6 0.3 107.4 0.4 30.8

Other 582.7 2.4 1082.8 3.8 500.1

Miscellaneous Goods (Undistributed) 1309.0 5.4 945.4 3.3 (363.6)Source: Central Bank of Egypt* According to the Harmonized System** Provisional.*** Including imports of free zones, and commodity grants & loans.**** Including gas, and bunker & jet fuel.

2007/2008 2008/2009**

July/Dec.

(5/3) Imports by Degree of Use* (Contd.)

Change(-)

- 134 -

(US$ mn)

2007/2008 2008/2009 ** 2007/2008 2008/2009 ** 2007/2008 2008/2009 **

Total *** 13103.1 13596.3 24372.0 28223.8 (11268.9) (14627.5)

European Union 4254.0 4534.4 8155.7 10434.3 (3901.7) (5899.9)

Other European countries 665.8 481.2 1879.5 2694.5 (1213.7) (2213.3)

Russian Federation & C.I.S 81.4 70.8 657.7 972.5 (576.3) (901.7)

United States of America 4180.3 4009.1 4936.7 4155.8 (756.4) (146.7)

Arab countries 1622.2 1923.7 2383.2 2878.6 (761.0) (954.9)

Asian countries (Non Arab) 1895.0 1802.9 4547.8 5592.7 (2652.8) (3789.8)

African countries (Non Arab) 176.8 403.0 172.1 245.0 4.7 158.0

Australia 9.5 9.8 86.4 101.6 (76.9) (91.8)

Other countries & regions 218.1 361.4 1552.9 1148.8 (1334.8) (787.4)

Source: Central Bank of Egypt* Including commodity grants and loans** Provisional.*** Including exports & imports of free zones

(5/4) Regional Distribution of Exports and Imports - 135 -

Export Proceeds Trade BalanceImport Payments *

July/Dec.

End of

Minimum

Maximum

Weighted average

Second: Market Rates Buy Sell Buy Sell

US Dollar 532.36 534.92 550.41 552.99

Euro 838.74 842.82 768.26 771.98

Pound Sterling 1059.99 1065.19 803.22 807.20

Swiss Franc 521.87 524.59 516.04 518.71

100 Japanese Yens 504.04 506.65 607.85 611.04

Saudi Riyal 141.96 142.66 146.62 147.39

Kuwaiti Dinar 2008.84 2020.02 1990.64 2003.59

UAE Dirham 144.92 145.64 149.84 150.56

Chinese Yuan 77.67 78.04 80.66 81.05

Source : Central Bank of Egypt

The interbank system started at 23/12/2004.

533.61

533.31

June 2008 December 2008

533.00 551.20

551.60

551.37

First: Interbank US$ Rates

(In piasters per foreign currency unit)

(5/5) Average LE Exchange Rates against Currencies

- 136 -

(US$ mn)End of

%Value%Value%Value(5.2)(1769.6)100.032123.2100.033892.8Total External Debt **(6.7)(2092.3)91.229281.292.631373.51- Medium & Long term debt :(6.4)(1004.5)45.514601.946.115606.4 Rescheduled bilateral debt +

(0.8)(63.8)24.17724.023.07787.8 ODA(12.0)(940.7)21.46877.923.17818.6 Non-ODA(4.7)(235.1)14.74737.014.74972.1 Other bilateral debt(5.6)(229.3)12.13901.112.24130.4 Paris Club Countries(0.7)(5.8)2.6835.92.5841.7 Other countries(57.2)(436.4)1.0327.12.2763.5 Suppliers' & buyers' credit0.0(3.2)22.97358.321.77361.5 International organizations

(18.0)(477.1)6.82174.77.82651.8 Egyptian bonds and notes351.664.00.382.20.118.2 Private sector (Non-guaranteed)12.8322.78.82842.07.42519.32- Short- term debt :8.790.73.51139.03.11048.3 Deposits15.8232.05.31703.04.31471.0 Other Facilities

Source: CBE-Loans & External Debt Department * Provisional.** The difference from World Bank data is in short-term debt.+ According to the agreement signed with Paris Club countries on 25/5/1991

(5/6) External Debt

- 137 -

December 2008 *June 2008 Change (-)

(5/7) Distribution of External Debt by Main Currencies(US$ mn)ChangeEnd of

(-)%Value%Value(1769.6)100.032123.2100.033892.8Total

3.740.813104.538.713100.8US dollar **(34.0)0.4135.00.5169.0Canadian dollar(47.0)0.3101.00.4148.0Australian dollar(29.0)1.8567.01.8596.0Swiss franc(60.0)0.6186.00.7246.0Sterling pound590.013.04191.010.63601.0Japanese yen(23.0)0.4139.00.5162.0Danish krone

0.00.01.00.01.0Norwegian krone(10.0)0.129.00.139.0Swedish krona(21.0)5.61789.05.31810.0Kuwaiti dinar

1.00.130.00.129.0Saudi riyal(2.0)0.135.00.137.0UAE dirham

(1560.0)30.69816.033.611376.0Euro(463.3)2.0642.73.31106.0Egyptian Pound(115.0)4.21357.04.31472.0SDRs

Source: CBE-Loans & External Debt Department* Provisional** Including other liabilities in US dollar

- 138 -

December 2008 *June 2008