The year 2005 witnessed a real breakthrough for the Egyptian economy with the launching of the third generation of economic reform laws, premised on the rules of global economy and reliance on state-citizen partnership. During this year, a number of legislation on income tax, customs and others geared to stimulate and encourage investments. The Egyptian Stock Exchange also showed remarkable performance, in spite of high volatility on the global level.In the context of the government's keenness on puruing its privatization program, stocks of a number of public sector companies were floated. In the same venue, Egypt, being both a recipient and donor state to a number of counties especially in Africa, participated in international conferences such as the United Nations conference of development ministers held on June 28 to discuss means of financing development under the slogan " From Aid to Trade".

Egypt also hosted the Euromoney conference in Sharm el-Sheikh on September 13 -14, under the slogan" Shaping Egypt's Strategy 2015", the tenth in a series of conferences promoting the Egyptian economy.

In the meantime, Egypt has keenly pursued its policy of liberalizing its trade both on the regional level particularly with Arab and African countries and on the European, Euro-Mediterranean and global levels, in line with its drive to integrate Egypt into world economy.
In this context, economic indicators really reflected the economic reforms already achieved. Growth rate increased to 5.3% in 2005 against 4.8% in 2004. The value of local investments hit LE 20 billions. Real per capita income rose 15% following the application of the recent tax cut measures. The reports of the International Monetary Fund confirmed that the growth rate of the Egyptian economy will achieve a rise of 6% by the end of 2006.

Thus, the achievements of the Egyptian economy in 2005 can be summed up as follows:
Economic and structural reform:

This year witnessed the launching of the third generation of economic reform laws, starting with banking reform involving foreign exchange market, monetary policy and development banking sector development. In this regard, foreign reserves hit $ 22 billions, following the stabilization of exchange rate. Inflation rate dropped to less than 4%. On September 25, 2005, the Central Bank of Egypt announced the merger of Banque Du Cairo with the Banqu Misr to help create a powerful and globally competitive banking entity.

Privatization program:

The year 2005 witnessed the implementation of a number significant deals as follows:
• The Egyptian Company for Fertilizers was acquired for $ 739 million.
• Misr International Bank was purchased by Banque Société Générale for LE 2.5 billion.
• The Egypt-Romania Bank was purchase by the Banque du Lebanon et d' Outre Mere for LE 497.9 million.
• The International Egypt-America Bank was bought by the Arab-African Bank for LE 239 million.
• Suez Cement Company was bought by the Italian Itali Cementi Company for LE 2.3 billion.

Issuing a series of economic laws:

A presidential decree was issued in January to boost foreign investments in Egypt. The New Tax Law was issued on June 8, 2005 which stipulated cutting income tax by 50%. On June 17, the Law of Custom Tariff was issued thus reducing tariff by 9% against 16% in 2004.

The stock exchangeand capital market :

The stock exchange achieved many successes that made one the most vibrant exchanges on the regional level. Trading indicators during the year showed record-breaking levels, with trading figures redoubling to LE 600-800 million from an average of LE 200-300 million in the first months of 2005. With the floating of the Egypt Telecom sharesThe exchange rate by the end of the year, the volume of trading in the Stock Exchange hit LE 2 billion. Share trading indicators rose by 100 and 150 %, while the total volume of transactions during the yearalmost hit LE 140 billion while the market value of the Stock Exchange LE 440 billion.

Yet, the most important achievements 2005 for the Egyptian Stock Exchange was its accession to the World Federation of Stock Exchanges during the meeting held in Bombay in India on October 31. The ABN-AMRO will issue papers derived from the Cairo and Alexandria Stock Exchange (CASE) indicator to be circulated in the world markets, a step which is the first of its kind in the Arab world and is expected to boost the Egyptian Stock Exchange as an emerging market. The US magazine of Businessweek selected the Egyptian Stock Exchange as one of the best emerging markets in the world after scoring a rise that hit 640% over the past three years.

International agreements and free trade zones:

Egypt participated in the full implementation of the Arab Free Trade Zone Agreement, which came into effect on January 1, 2005 by removing customs on trade exchanges among the 17 Arab countries, signatory to the agreement. As regards Africa, Egypt adopted important measures to establish free trade zone agreements with the COMESA and ICWAS groupings. With respect to Europe, Egypt signed a protocol with the EU to expand the Egyptian-EU Association Agreement. Before the end of 2005, Egypt signed a free trade zone agreement with Turkey.

On the level of conferences, Egypt hosted the conference of Microsoft Developers in the Middle East where Bill Gates himself took part in the conference. Egypt also participated in Davos Forum being the most important economic gathering in the world. On November 30, Egypt hosted the meetings of the third International Forum on Investment and Trade in which the then Minister of Tourism Ahmed Al-Maghrabi revealed that the number of tourists who visited Egypt in 2005 hit 8.1 million, a matter which increased Egypt's income of foreign currency to $ 6 billion. In December, Egypt effectively participated in the sixth ministerial meeting of the World Trade Organization held in Hong Kong where the then Minister of Trade called for maintaining a balanced world trade system based on transparency and justice.

International recognition:

The institutions of Fitch and Standard and Poore's confirmed that the measures taken by the Egyptian government will increase the competitiveness of the Egyptian economy. The report of the IMF stressed that Egypt ranked 6th as one of the top 12 emerging markets in the world. The report of competitiveness noted that Egypt ranked 53 in the world as regards the three indicators of competitiveness (technology, public institutional efficiency and economic environment).