Egypt's trade deficit is a serious danger and threatens development, say economic experts, particularly after the recent deficit increase. Experts say Egypt's trade deficit was never covered during the 30 years of the former regime. The main reason for the deficit is declining Egyptian exports. This crisis caused a major deficit in Egypt's trade balance. Egyptian exports do not exceed 12 billion EGP (U.S. $2 billion) monthly, while Egypt imports about 23 billion EGP (U.S. $3.9 billion). “Egypt's trade balance became familiar with deficit during the past thirty years,” said Mahmoud Abdul Hai, a consultant for the National Planning Institute. “By the end of last year, exports reached $23 billion, while imports reached $49 billion,” he added. Abdul Hai also said according to these numbers of economic decline, increasing unemployment rates are expected. The government, therefore, must work on increasing production, providing jobs and increasing development rates in order to pass the current phase with the least amount of loss. Dr. Sultan Abu Ali, an economic expert, said the increasing deficit of trade balance is a danger that threatens economical development. “The deficit of trade balance can be covered by promoting local products, rationalizing imports and increasing production in order to increase exporting as well, ” said Abu Ali. “Increasing international prices contribute to increasing imports,” said Abdul Motelb Abdul Hamid, dean of economic research in Sadat Academy. Abdul Hamid said it is important to increase industrial and agricultural production in order to increase exports. Increasing crop production may help cover the trade balance deficit, but it needs an ambitious plan and cooperation with neighboring countries, such as Sudan. Abdul Hamid stressed that investment procedures must be facilitated in order to attract more foreign investment. “Foreign investment is another way to cover the deficit of trade balance and to increase exports,” said Abdul Hamid. He added that foreign investments provide technology, experience and skillful administration. That will help increase production and establish new industries as happened in construction, iron and steel, chemical, pharmaceutical and medical supplies industries. It should be mentioned that Central Agency for Public Mobilization and Statistics announced a 19 percent increase in the trade balance deficit. The deficit reached 11.256 billion EGP in June 2011, while it was 9.4 billion EGP in June 2010.
