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FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2010EGYPTIAN EXCHANGEECONOMIC AND POLITICAL DEVELOPMENTSBesides the minor political tension that hasbeen going on in the region, Egypt hasmaintained a stable political environmentduring 2009 that is considered investorfriendly.On the economic front, the Egyptian economyhas outbalanced the impact of the globalfinancial crisis throughout year 2009 mainly onthe back of the measures undertaken by theEgyptian government, including the US$ 3billion subsidy to support the infrastructureprojects and to stimulate the economy as wellas rising the domestic demand by decliningcommodity prices. In addition, the country’ssound banking system, whereby high riskinvestments is rejected, have helped toalleviate the effect of the crisis.Projections were limiting the economic growthrate between 3-4% but the Egyptian economyhas grew by 4.7% during fiscal year2008/2009, recording one of the best growthrates among emerging countries.Moreover, the Central Bank has reduced theovernight deposit and lending rates sixconsecutive times during 2009 to reach 8.25%for deposits and 9.75% for lending, which inturn decreased the inflation rate to reach 10%during 2009 down from 18% the previous year.The FDIs highly surpassed expectations by27% to record US$8.1 billion in fiscal year08/09 highlighting investors' confidence inEgypt's potential. Furthermore, Egypt's NetInternational Reserves reached US$ 34.2billion in December 2009, compared toUS$ 34.1 billion last year.However, like the rest of the world, Egyptfaced a fall in international trade and externaldemand which has negatively affected Egypt'sExport, Suez Canal and tourism proceeds,which have collectively materialized a negativeBalance of Payments in fiscal year 2008/2009.Despite exposure to the consequences ofglobal imbalances in international prices andeffects of the global financial turmoil during2008/2009, the Egyptian governmentmanaged to remain the budget deficitstabilizing at 6.9%.** Information provided by EGXKey Information ContactsMinistry of Finance www.mof.gov.egMinistry of Investment www.investment.gov.egCentral Bank of Egypt www.cbe.org.egEgyptian Financial Supervisory Authority www.efsa.gov.egMisr for Clearing, Depository and Central Registry www.mcsd.com.egSMEs Market (NILEX) www.nilex.egyptse.com2008/09-ORIGINS OF GROSS DOMESTIC PRODUCT (%)Manufacturing Mining (incl. oil & gas) Agriculture OtherWholesale & Retail Trade General government Transportation2008/09-COMPONENTS OF GROSS DOMESTIC PRODUCT (%)Private consumption Government consumption Gross fixed investmentExports of goods & services Imports of goods & services Changes in stocks16.1014.3428.7313.3710.898.038.5480706050403020100PAGE 82