Economy's growth builds demand for U.S. products - Egypt - World Trade Outlook

The Egyptian economy is growing at a rate of about 3 percent annually. In 1988, U.S. exports to Egypt increased 6 percent, while imports fell 51 percent over 1987. The big ticket items continue to be agricultural commodities and machinery, aircraft and aircraft parts, communications equipment, computers, and medical equipment. Other possible exports include large refrigeration and airconditioning units, generators, ice machines, and equipment related to the tourist industry, such as touring buses and edible preparations.

Egyptian planners must cope with a number of domestic economic problems: inflation, which is approaching 20 percent annually; accumulating current account imbalances; increasing foreign debt; and a population growth rate of 2.65 percent annually.

The government of Egypt is attempting to rectify the economic problems. It has announced that investment laws will be revised to provide greater stimulus to private enterprise and that public sector companies will be given greater latitude and responsibility to operate profitably. It has pledged to enact measures to increase government revenues and rationalize subsidies so as to reduce the need for borrowing and inflationary money creation. A campaign has been launched to promote exports. It has approved several dozen new oil exploration concession agreements with foreign companies to expand oil and natural gas production. The Egyptian govemment is also encouraging the private sector to develop the highly promising tourism industry.

Foreign exchange controls and regulations have been somewhat liberalized. In January, the Egyptian government invited the International Monetary Fund and World Bank to resume negotiation of a package of domestic economic reform measures and external financial support that will place Egypt on the road to renewed economic health.

U.S. companies interested in exploring or expanding in the Egyptian market may want to take advantage of Commerce Department-scheduled events for 1989. Trade missions scheduled include Commercial/Industrial Refrigeration Equipment, May 15-19; Telecommunications Equipment, June 17-21; and Joint Cooperative Relationship Medical Equipment hosted by the New Jersey ITA District Office, July. Video Catalog Exhibitions include Safety and Security Equipment, June; Food Production Equipment, Nov. 1-2; and Airconditioning and Refrigeration Equipment, December.

For further information on prospects in Egypt or Egypt's economy, contact the Egypt desk officer, (202) 377-4652.

COPYRIGHT 1989 U.S. Government Printing Office
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