CAIRO: The monthly report by the Center for Information and Decision Support of the Egyptian Cabinet of Ministers revealed that the rate of inflation increased in October by 13.3 percent, increasing fears that the worst of Egypt's financial problems may lie ahead. The new report comes as holiday-goers once again were met with high prices at the supermarket. The report added that the overall trade balance for the country scored a deficit, which amounted to $25.2 billion during the second quarter of 2009. The report pointed to other nations that achieved a surplus as a possible example Egypt could take. It reported that South Korea reported a $35.1 billion surplus and Malaysia a $33 million. The report added that the consequent deficit in current the account balance reached about $4.4 billion during the second quarter of 2009. The report also showed that the total loans obtained by the government until September from banks operating inside Egypt amounted to 32.4 billion Egyptian pounds ($6 billion), an increase of 1.5 billion from last year as the government attempts to get out of the financial crisis. The report showed a lower number of companies that have reported to the Department of Commercial Registration, falling from 12,584 companies during the period from the beginning of January until the end of October 2008 to about 11,179 companies during the same period of 2009, down by 11.2 percent. This sector has also witnessed lower capital sources, including funds that have been established during the same period by 29.4 percent from 16.3 billion Egyptian pounds to about 11.5 billion Egyptian pounds. It is a sign of growing financial concerns for Egypt, the report added. Exports of natural gas and petroleum products declined by 43.8 percent during the month of September 2009 compared to last year, from $368 million to $207 million dollars as foreign buyers look elsewhere and closer to home for their energy needs. The report pointed out that the production of reinforcing steel in Egypt fell from 528 thousand tons during the month of September to about 364 tons during the following month, a decline of about 1.31 percent and that the sales of rebar decreased from 395 thousand tons last September to about 323 tons in October, a decline of about 20 percent. The decreased production of “gray” cement fell by 17 percent last September compared with August – 1.4 million tons to 3.4 million tons – while the average domestic prices increased by 2.12 percent compared to last year. The government, however, says that the country is moving out of the worst it has seen of the financial crisis and expects investment and companies to rebound as early as January. “We expect to see companies improve and get back on track in the near future. It has been a tough time, but we feel confident that there is not as much pessimism that had existed,” said Samiha Fawzy of the Ministry of Trade. **reporting by Mohamed Abdel Salam BM
