al weaknesses continue to cloud the horizon, with the very low level of non-oil exports the major concern. The decision to cut taxes on exported production is a positive step to increase investment for exports, but the big trade deficit has to become a clear target of government policies.
             The private sector is now growing very quickly, as highlighted by the earnings growth expected by listed companies: we forecast earnings growth of nearly 28% this year, nearly 17% in 2000 and 16.4% in 2001. As economic reform has altered consumer attitudes over the last few years, all areas of the economy have seen the development of private sector companies and have begun to reap the rewards through increased consumer spending.
             The restructuring at the central bank under the control of the Ministry of Economy should bring about a number of welcome changes. At present, the management of foreign exchange reserves is under review, with all areas of the bank's operations being scrutinized. One of the key issues to be addressed is the perception of the value of the Egyptian pound. We have already seen a de facto devaluation of the Egyptian pound this year of around 3-3.5% if currency is traded in the private sector-and the public sector banks may follow these rates in due course.
             There is no need for a significant devaluation given the negative effects which would accrue-inflation and an increasing trade deficit-since Egypt is not yet in a position to export enough goods to benefit from a devaluation. We expect far greater clarity of operations at the central bank, particularly with regard to the exchange rate mechanism and increased flexibility in the handling of currency demands.
             Exports analysis, 1998A.
             Egypt's large trade deficit is an area of concern, particularly the fact that non-oil exports are so low. It is no great surprise that Egypt continues to maintain a large trade def...