With the establishment of a new government in July 2004, Egypt launched an economic reforms program, including a large stimulus plan in 2008. Consequently, tariffs and taxes were lowered and simplified. The transparency of the national budget was reinforced and many privatizations were initiated. This new policy bore its fruits as growth reached a level of more than 5% in 2009 and 2010, especially thanks to the resumption of private and public consumption. The construction, communications, wholesale and retail sectors, catering and hospitality, as well as manufacturing contributed to the development of economic growth. However, the year 2010 was marked by an under-performance of the sectors which most strongly contribute to the country’s GDP, namely agriculture and mining. The IMF growth estimates for 2011 are between 5.5% and 5.8%, counting on the increase in consumption, recovery of foreign growth (tourism and the Suez Canal) and a resumption of investments.

Although the Egyptian economy has entered into a cycle of progressive growth, its level of growth remains insufficient to maintain employment and reduce the share of population living below the poverty of line (18%). In addition, the country faces a high rate of inflation (about 10%). Foreign accounts, weakened during the crisis by a decline in foreign exchange earnings and net capital flows, have recovered and the trade balance returned to surplus in 2010.

Agriculture contributes around 13% of the GDP and employs about a third of the active population. The warm climate and the abundant Nile water allows for several annual harvests. The main crops are cereals, cotton, sugar cane and beets.

Egypts remains a country with little industry. With its diverse natural reserves (gold, minerals, iron, oil and gas), oil and gas-related activities and the secondary sector account for just over a third of the GDP. Egypt is the world’s sixth largest exporter of natural gas.

Finally, the tertiary sector represents around 50 % of the Egyptian GDP. It is largely dominated by revenues from telecommunications (which grew by 11% during the first quarter of 2010) and from tourism (the tourist industry brings about 11b in annual revenues. For example Cairo received 14m of visitors in 2010).

In spite of its economy’s diversification, the country still depends for a large part of its income on the Suez Canal (380m during the first quarter of 2010).

The Egyptian market is gradually opening up, especially after signing an agreement with the European Free Trade Association (EFTA) in 2006, and a free trade treaty with the United States. Its three primary export partners are the European Union, which represents more than a third of the trade, United States and Syria. The EU and the USA absorb almost 60% of egyptian exports. Egypt mainly exports mineral fuels and oil, cotton, iron and steel. It imports mainly consumer electronic goods and capital goods, nuclear reactors and nuclear-powered boilers, cereals, food products and chemical products. Import volume has doubled and is twice the export volume, a fact which contributed to the deterioration of the country's trade balance, now a deficit (USD 25.1b in 2010)

With the rapid influx of new investments since 2005, Egypt became the first recipient of FDIs in the Middle East, and 3rd in the Arab world after Saudi Arabia and United Arab Emirates.

The dynamic growth of the Egyptian economy (around 7% in the recent years), the strategic geographical position of the country, its low labor costs and skilled workforce, a unique tourist potential, substantial energy reserves, large domestic market and the success of reforms undertaken by the authorities since 2004 (including many privatizations) are all factors that may explain the sharp rise of FDI.

The regional context should also be taken into account, as Egypt has benefited from abundant liquidity coming from the Gulf countries, as a direct result of the increase in revenues generated by oil exports.

However, because of the economic crisis, FDI flows, which had been slowing down since the summer of 2008, halved in the two last years: a decrease in 40% in 2008-2009, with 8.1 billion dollars and a decrease of 17% in 2009-2010, with 6.8 billion dollars.

FDI comes mainly from the European Union, the United States and the Arab countries. The United States, for a long time the number one investor in Egypt, have now been exceeded by the European Union.

Investments focus primarily on tourism, construction, telecommunications, financial services, energy, and healthcare.