Economic growth for the first quarter of 2006 year reached 6.1 per cent, with inflation properties for sale Egypt going down to around three per cent. Egypt's foreign currency reserves currently stand at almost $23 billion, thanks to higher net capital inflows generated from tourism and Suez Canal revenues. Foreign direct investments grew in 2004/2005 to reach $ 3.9 billion, which is an increase of around $2 billion from the year before.

The improved macro-indicators directly reflect the multi-faceted approach to reform recently adopted by the Egyptian government. When the new cabinet headed by Nazif was sworn in, in the summer of 2004, it tackled the immediate and pressing problems of investors, especially regarding the customs and tax regimes which many saw as over- bureaucratised and not offering sufficient incentives. Reforms in these two domains in particular have helped reinstate confidence in the economy. With its renewed emphasis on providing a better investment environment, the government is now hoping to attract the foreign investment needed to generate jobs in a market which absorbs some 700,000 new entrants every year. To this one may add a backlog of unemployed youth, some of whom have been without a job for over a decade. "Domestic investment is simply not sufficient to attain the desired growth rates of seven to eight per cent." says Tareq Allouba, International Finance Corporation (IFC) senior investment officer.

While striving to make investors' life easier, the government has also begun to speed up privatisation. The new momentum which the privatisation process has gained was lauded recently by an International Monetary Fund (IMF) mission which described it as "exceeding expectations". The banking sector has also undergone reforms that are changing the face of the industry. The government's stake in joint-venture banks is now being speedily divested, with the long-awaited privatisation of the first of the four main public sector banks underway. Last April, interested buyers submitted their proposals for the purchase of a 75 to 80 per cent stake of the Bank of Alexandria.

Two other public sector banks, Banque du Caire and Banque Misr will be merged together later this year. With the finalisation of sale of Bank of Alexandria, and the merger of the two public sector banks, only two public sector commercial banks will be remaining in business.

The Egyptian banking sector is one area that has received an influx of foreign investment, with the entry of the Greek Piraeus Bank which purchased the Egyptian Commercial Bank and the expansion of the existence of Calyon Corporate and Investment Bank, part of the French Credit Agricole Group, through its purchase of the Egyptian American Bank. Société Général also grew its presence in the Egyptian market by buying out Misr International Bank. And the Lebanese Blom Bank took over Misr Romania Bank. Also, a consortium including Ripplewood Holdings, Eton Park Capital Management and RHJ International purchased the National Bank of Egypt's share in Commercial International Bank.