Central Bank of Egypt

Transcription

1 Central Bank of Egypt External Position of the Egyptian Economy FY 2017/18 Volume No. (62)

2 Central Bank of Egypt External Position Preface The External Position of the Egyptian Economy Report is a series produced by the Economic Research Sector in the Central Bank of Egypt (CBE). The report tracks, on a quarterly basis, the international transactions that the Egyptian economy conducts with the rest of the world. It relies, for this purpose, on the national statistics that are regularly compiled in line with the SDDS prescriptions. Enthused by the CBE's keenness to enhance its disclosure, transparency and communication policy, the Report is meant to serve several functions. Generally, it spreads, to a broad array of readers, knowledge of Egypt s external accounts including the balance of payments, external debt, international investment position and external liquidity. Particularly, it monitors key external sector performance indicators of the economy in order to identify areas of policy needs. The information revealed in this series has also significant implications for decision-making, investment climate, doing-business environment and sovereign credit ratings. The report contains 7 sections. The first two sections give a performance portrait of the key components of Egypt's Balance of Payments (BOP) and the tourism sector performance. The third and fourth review developments related to the International Investment Position (IIP) and external liquidity. The fifth and sixth show Egypt's external debt in its different classifications and the exchange rate developments. The last section is a statistical part that provides more details on the above mentioned six sections. This is in addition to a glossary. The report is available at the CBE's website Hard copies can be obtained from the Economic Research Sector, 8th floor, 54 El Gomhoreya Street, Cairo.

3 Central Bank of Egypt External Position Table of Contents Overview Page Section I: Balance of Payments (BOP) BOP Performance 1 1-Current Account 1 2-Capital and Financial Account 4 Section II: Tourism Sector Performance Summary: 7 A- Tourism Sector Performance 7 B- Hotel Sector Performance 8 Section III: International Investment Position (IIP) Section IV: Section V: External Liquidity A -Net International Reserves (NIR) 13 B -Net Foreign Assets of Banks (NFA) 13 External Debt A - Breakdown by Maturity 15 B - Breakdown by Type 16 C - Breakdown by Currency 16 D - Breakdown by Creditor 17 E - Breakdown by Debtor 17 F - External Debt Indicators 18 Section VI: Exchange Rate Developments 19 Section VII: Statistics Appendix I 1- Balance of Payments International Investment Position (IIP) Coordinated Portfolio Investment Survey (CPIS) NIR & NFA at Banks External Debt by Type External Debt Indicators External Debt by Debtor Foreign Exchange Rates 31

4 Central Bank of Egypt External Position Table of Contents (Cont.) Page Appendix II A- Outstanding External Debt B- Outstanding External Debt By Currency 47 C- Disbursed and Undisbursed Amounts for Signed Loans & Deposits 48 D- Projected Medium- and Long-Term Public and Publicly Guaranteed External Debt Service E- Projected Short-Term Debt 61 F- Exchange Rates of the Currencies of External Debt versus US Dollar 62 Appendix III Box. (1): Egypt's Subscription to SDDS and Data Quality Dimensions 65 Box. (2): Egypt's Data Quality Dimensions 66 Box. (3): Doing Business in Egypt 67 Box. (4): Tourism Sector Performance 68 Glossary 69

5 Central Bank of Egypt External Position Overview Aiming to place Egypt's external position on a more sustainable footing and encourage foreign investors back to the country, the CBE decided on 3 November 2016 to unpeg the Egyptian pound, allowing its value to float. Accordingly, bid and ask exchange rates would be determined by forces of demand and supply. By floating the pound, the Central Bank would eventually be able to fully dismantle FX restrictions, and reduce disruptions to activity. Such a courageous move aims to quash the currency parallel market and attract the much-needed foreign capital. This decision helped replenish international reserves through the official market. Egypt's transactions with the external world recorded an overall BOP surplus of about US$ 12.8 billion during the FY 2017/2018 (against about US$ 13.7 billion in the previous FY). The current account deficit narrowed by 58.6 percent to about US$ 6.0 billion (from about US$ 14.4 billion). The capital and financial account recorded a net inflow of about US$ 22.0 billion (against about US$ 31.0 billion). The decline in the current account deficit was mainly traceable to the following developments: the services surplus surged by 98.1 percent, recording about US$ 11.1 billion, net unrequited current transfers scaled up by 21.2 percent to about US$ 26.5 billion, the trade deficit remained stable at about US$ 37.3 billion, and the income balance ran a deficit of about US$ 6.3 billion. The capital and financial account revealed the following developments: the net inflows of FDI in Egypt registered about US$ 7.7 billion, portfolio investment in Egypt decelerated, registering a net inflow of about US$ 12.1 billion, and other assets and liabilities achieved a net outflow of about US$ 7.7 billion. Egypt s International Investment Position (IIP) at end of June 2018 recorded net external liabilities (assets minus liabilities) of about US$ billion, up by 12.4 percent compared to end of June Net International Reserves (NIR) increased by around US$ 13.0 billion to reach US$ 44.3 billion, thus covering 8.4 months of merchandise imports at end of June The increase was a result of the rise in foreign currencies by about US$ 11.0 billion and in SDRs by US$ 2.0 billion. During the Report s preparation, NIR reached US$ 44.5 billion at end of October Banks net foreign assets decreased by US$ 2.7 billion during FY 2017/2018. Foreign currency deposits with banks increased by 4.5 percent during the period concerned, reaching US$ 40.2 billion at end of June As a percentage of total deposits, they made up 23.8 percent. Total external debt recorded US$ 92.6 billion at end of June 2018, up by 17.2 percent (compared with about US$ 79.0 billion at end of June 2017). The external debt remains within manageable limits, and its position continues to have a favorable structure, as 86.7 percent of the debt are medium- and long-term. The weighted average of the interbank foreign exchange market rate revealed that the Egyptian pound interbank rate appreciated by 1.1 percent during FY 2017/2018, as the EGP reached per US dollar at end of June 2018, against EGP per US dollar at end of June 2017.

6 Section I Balance of Payments (BOP)

7 Central Bank of Egypt External Position 1 E gypt's transactions with the external world recorded an overall BOP surplus of about US$ 12.8 billion during FY 2017/2018 (against about US$ 13.7 billion in the previous FY). The current account deficit narrowed by 58.6 percent to about US$ 6.0 billion (from about US$ 14.4 billion). The capital and financial account recorded a net inflow of about US$ 22.0 billion (against about US$ 31.0 billion). Chart (1) shows the developments in Egypt s BOP main components, on quarterly basis. US$ bn Chart (1) : Egypt's BOP Main Components Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016/ /2018 Capital & Financial Account Current Account Overall Balance 1- Current Account The decline in the current account deficit was mainly traceable to the following developments: the services surplus surged by 98.1 percent, recording about US$ 11.1 billion (against about US$ 5.6 billion), net unrequited current transfers scaled up by 21.2 percent to about US$ 26.5 billion (versus about US$ 21.8 billion), the trade deficit remained stable at US$ 37.3 billion, and the income balance ran a deficit of about US$ 6.3 billion (against about US$ 4.6 billion). BOP Performance 1.1: Trade on Goods Trade volume increased by 10.2 percent, to reach US$ 88.9 billion (35.5 percent of GDP) during FY 2017/18. The trade deficit has stabilized at US$ 37.3 billion (14.9 percent of GDP), due to the following developments: Merchandise exports increased by 18.9 percent to reach US$ 25.8 billion, due to the increase in both oil exports by 33.1 percent, to reach US$ 8.8 billion (34.0 percent of total exports) and non-oil exports by 12.7 percent to reach US$ 17.1 billion (66.0 percent of total exports). As a result, the exports/imports ratio mounted to 40.9 percent, from 36.8 percent. Merchandise imports increased by 6.9 percent to reach US$ 63.1 billion, reflecting the increase in both non-oil imports by 7.7 percent to US$ 50.6 billion (80.2 percent of total imports), and oil imports by 3.9 percent to reach US$ 12.5 billion (19.8 percent of total imports). عنوان US$ المحور $ bn Chart (2): Oil & Non-oil Exports and Imports Fiscal Years 2015/ / /2018 Oil exports Oil imports Trade balance Non-oil exports Non-oil imports The following charts illustrate the distribution of commodity exports by degree of processing and imports by degree of use during FY 2017/18.

8 Central Bank of Egypt External Position 2 Fuel, mineral oils & products 34.7% Fuel, mineral oils & products 20.7% Hereunder is the geographical distribution of merchandise exports and imports: Asian Countries (Non-Arab) 10.4% Chart (5) : Exports by Geographical Distribution FY 2017/2018 African Countries (Non-Arab) 2.6% Arab Countries 23.4% USA 8.0% EU 34.8% Other EU Countries Russian 8.2% Federation &C.I.S 1.2% - Egypt's main trade partners in terms of exports were Italy, UAE, USA, UK, Turkey, India, Saudi Arabia, Germany, Switzerland and Spain. These countries combined, accounted for some 57.9 percent of total exports. African Countries (Non-Arab) 1.1% Asian Countries (Non-Arab) 19.9% Chart (3): Proceeds of Merchandise Exports US$ 25.8 bn Raw materials 7.6 % Australia & Other Countries 11.4% Australia & Other Countries 13.8% Arab Countries 19.6% Semifinished goods 16.7% Chart (4): Payments for Merchandise Imports Raw materials 9.4% US$ 63.1 bn, of which Intermediate goods 31.3% Chart (6) : Imports by Geographical Distribution FY 2017/2018 USA 4.7% Investment goods 14.1% EU 26.5% Russian Federation & C.I.S 7.7% Finished goods 41.0% Consumer goods 20.6% Other EU Countries 6.7% - As for imports, Egypt's trade partners were China, Saudi Arabia, UAE, Russia, Germany, USA, UK, France, Switzerland, Turkey, Italy and Brazil. These countries combined, accounted for some 52.4 percent of total imports. 1.2: Services Balance Services surplus doubled to about US$ 11.1 billion (against about US$ 5.6 billion), as the increase in services receipts outpaced the rise in services payments, as follows: US$ bn Chart (7) : Services Balance Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016/ /2018 Services Receipts Services Payments Services Balance 1.2.1: Services receipts increased by 39.5 percent, to some US$ 21.5 billion (against about US$ 15.4 billion), driven by the increase in the following items: Tourism revenues to about US$ 9.8 billion (against about US$ 4.4 billion), driven by the increase in the number of tourist nights to million nights (against 50.9 million nights). This was concurrent with the increase in the average of tourist expenditure per night. Transportation receipts by 10.1 percent to about US$ 8.7 billion (against some US$ 7.9 billion), due to the increase in Suez Canal dues by 15.4 percent to about US$ 5.7 billion (against some US$ 4.9 billion), which increased, in turn, as a result of the rise in net tonnage by 9.8 percent, and the increase of SDR against the US dollar by 3.8 percent. Another contributing factor was the increase in the receipts of Egyptian navigation and airline companies.

9 Central Bank of Egypt External Position 3 Other services receipts increased by 0.2 percent to about US$ 2.34 billion (against about US$ 2.33 billion), due to the increase in the receipts of constructions services, the agencies commissions, and advertising & market research services. On the other hand, government services receipts decreased by 18.0 percent to US$ million (against US$ million), due to the decrease in other governmental receipts US$ bn Chart (8): Services Balances Components Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016/ /2018 Other Services Balance Tourism Services Balance Services Balance Government Services Balance Transportation Services Balance 1.2.2: Services payments rose by 5.9 percent, to about US$ 10.4 billion (against about US$ 9.8 billion), driven by the increase in the following items: Government services payments by 32.9 percent to US$ 1.5 billion (against US$ 1.1 billion), reflecting the increase in the salaries of government employees seconded abroad, other governmental expenses, and the expenses of Egyptian embassies abroad. Other services payments by 7.6 percent, to about US$ 4.9 billion (against about US$ 4.6 billion), driven by the increase in the amounts transferred abroad by foreign petroleum companies, communication services, royalties and license fees, and computer services and subscription to magazines & newspapers. Transportation payments by 11.1 percent, to US$ 1.5 billion (against US$ 1.3 billion), due to the rise in the amounts transferred by foreign navigation and airline companies, airplanes and ships rental fees, and amounts transferred as transportation services. On the other hand, travel payments fell by 10.5 percent to about US$ 2.5 billion (against about US$ 2.7 billion), due to the decline of e-card payments abroad. 1.3: Income Balance Investment income balance ran a deficit of about US$ 6.3 billion in FY 2017/18 (against some US$ 4.6 billion), as an outcome of the rise of investment income payments to register about US$ 7.1 billion (against some US$ 5.1 billion), 58.7 percent of which were profit transfers by oil and non-oil foreign companies operating in Egypt. Meanwhile, the investment income receipts increased to register US$ million (against US$ million). US$ bn Chart (9): Income Balance Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016/ /2018 Income Receipts Income Payments Income Balance

10 Central Bank of Egypt External Position 4 1.4:Unrequited Current Transfers (Net) Net unrequited current transfers scaled up by 21.2 percent to about US$ 26.5 billion (from US$ 21.8 billion), mainly due to the increase in net private transfers from US$ 21.7 billion to US$ 26.3 billion, supported by the increase in workers remittances by about US$ 4.6 billion. US$ bn Against this background, some of the external balance indicators changed as shown in chart (11). % Chart (10) : Remittances of Egyptians Working Abroad Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016/ /2018 Workers' Remittances Remittances to GDP Chart (11): External Balance Indicators Current Receipts / Current Payments Services Receipts / Services Payments 2016/ / (%) Merchandise Exports / Merchandise Imports 2- Capital and Financial Account The capital and financial account recorded a net inflow of about US$ 22.0 billion in FY 2017/18 (against some US$ 31.0 billion), as an outcome of: A- Total FDI inflows registered about US$ 13.2 billion, while total outflows recorded about US$ 5.4 billion. Accordingly, net inflows of FDI in Egypt registered about US$ 7.7 billion. It is worth mentioning that net inflows for oil sector investments increased by 12.2 percent, to post about US$ 4.5 billion. The sectorial breakdown of total FDI inflows as depicted in chart (12) shows that the oil sector has the biggest share (67.3 percent). As for the other sectors, the majority of FDI went to the services sectors, with 11.2 percent distributed as follows: the communication and information technology (3.4 percent), other services sectors (2.9 percent), the real estate sector (2.7 percent), the financial sector (1.9 percent), and tourism sector (0.3 percent). The share of the manufacturing sector was 10.0 percent, the construction sector was 4.5 percent, the agricultural sector was 0.1 percent, and the remaining portion was acquired by undistributed sectors.

11 Central Bank of Egypt External Position 5 Chart (12): Total FDI in Egypt by Economic Sector FY 2017/2018 Construction sector 4.5% Agriculture sector 0.1% Manufacturing sector 10.0% Undistributed sectors 6.9% Real estate sector 2.7% Petroleum sector 67.3% Services sector 11.2% Financial sector 1.9% Tourism sector 0.3% Communication sector 3.4% Other services 2.9% B- Portfolio investment in Egypt retreated, registering a net inflow of US$ 12.1 billion (versus US$ 16.0 billion). This was largely ascribed to the decrease in foreigners' investments in Egyptian TBs, recording net purchases of about US$ 6.5 billion (against about US$ 10.0 billion), as a result of the withdrawals of foreign investors from the emerging markets. C- Medium - and long-term loans and facilities recorded net disbursements of about US$ 7.9 billion (against about US$ 8.0 billion). D- Short-term suppliers' credit realized net disbursements of about US$ 2.4 billion (against about US$ 1.7 billion). E- Other assets and liabilities achieved a net outflow of about US$ 7.7 billion (against about US$ 2.5 billion). This came on the back of the net change in the liabilities of the CBE to the external world, to post a net external repayment of about US$ 3.9 billion in the year under review (against a net disbursement of about US$ 8.1 billion) causing a decline in the CBE's liabilities to the external world.

12 Section II Tourism Sector Performance

13 Central Bank of Egypt External Position 7 Tourism Sector Performance during 2017/2018: The data accumulated for the year 2017/2018 point to an increase in tourist arrivals and nights and also shows a hike in receipts when compared with the previous year levels. Average expenditure per night increased from US$ 86.1/night in the previous year to US$ 95.6/night in 2017/2018. Tourism Sector Performance during Q4 2017/2018: According to the balance of payments data during Q4 2017/18, tourism receipts recorded an increase of US$ 1015 million or percent to US$ 2554 million compared with the same period last year. This is due to the 8.4 percent increase in the average expenditure per night, in addition to the 6.6 percent increase in average nights spent per visitor. Egypt's tourism sector activity witnessed a moderate increase Q-over- Q. In the fourth quarter of 2017/18, number of tourist arrivals has witnessed a 11.6 percent increase, while tourist nights increased by 12.4 percent. On the other hand, the average expenditure per night stayed the same at US$ 95.6/night during Q3 and Q4 of 2017/18. Data shows a slight increase in the number of average tourist nights (10.4 nights per person, compared to 10.3 nights per person). Tourists coming from Africa and Middle East countries headed the list in terms of the length of stay per visitor with 17.6 and 12.9 nights per visitor, respectively. Hotel Sector Performance: As regards hotel sector performance and its regional comparison during the first seven months of 2018, Cairo hotels experienced a noticeable increase in terms of "revenue per available room" that reached 20.2 percent compared with the same period last year. (Table 2) Summary Tourism Market Diversification: According to the number of tourist arrivals over the 1989/ /14 period, Egypt's tourism market witnessed a shift from diversification towards concentration in favor of European region, as the Herfindahl- Hirschman Index (HHI) reached 0.6 in 2013/14. However, the index then fell down this year reaching 0.41 indicating more diversity, yet less diversified than the previous year which reached This draws attention to the fact that necessary steps should be taken towards a more diversified tourism market to be able to mitigate any future demand shocks. Nevertheless, Egypt's market is still more diversified when compared to some neighboring countries in the MENA region. (See Box 4, Appendix III). A- Tourism Sector Performance: Ministry of Tourism figures show that a total of 2,661 thousand tourists came from all over the world and spent 26,712 thousand nights in Q4 of 2017/2018, with an increase of 46 percent in the number of tourist arrivals and an increase of 53.1 percent in the number of nights, compared with the same period of the previous year. The increase in tourist arrivals resulted from more visitors coming from the European countries (70.62 percent of total increase), Middle East region (16.92 percent), African countries (7.11 percent), the Americas (2.61 percent) and Asia and the Pacific region (1.4 percent) Chart(1):Tourist Arrivals (In Thousands) Q1 Q2 Q3 Q4 2014/ / / /2018

14 Central Bank of Egypt External Position 8 Meanwhile, the average expenditure per night increased from US$ 88.2/ night in Q4 of 2016/2017 to US$ 95.6/ night in Q4 2017/2018 (table 1, line 7). The positive growth in the number of tourist nights (12.4 percent), was behind the increase in tourism receipts by US$ 283 million or 12.5 percent to US$ 2554 million Q-over-Q in the fourth quarter of 2017/18 (table 1, line 1) Chart(2): Travel & Tourism Receipts (USD Million) Q1 Q2 Q3 Q4 2014/ / / /2018 During Q4 of 2017/2018, data show that visitors stayed more nights, registering an average of 10.4 nights per person, compared to 9.8 nights per person in the corresponding quarter a year earlier (table 1, line 6). Tourists coming from Africa headed the list in terms of the length of stay per visitor with an average of 17.6 nights. The Middle East countries were the runner up with 12.9 nights/visitor, followed by the Americas (12.3 nights/visitor), Asia and Pacific region (9.6 nights/ visitor), and the European countries (8.9 nights/ visitor). B- Hotel Sector Performance: In order to make a sound judgment on hotel sector financial performance over the time and across key Arab cities, one should combine occupancy rate with revenue per available room (RevPAR) 1. Table 2 shows an increase of 20.2 percent on average RevPAR for Cairo, during the first seven months of The revenue per available room provides a convenient snapshot of how well a hotel is filling its rooms, as well as how much it is able to charge. As a matter of fact, there is a sharp increase in RevPAR during the first seven months of 2018, as compared to the same period of the previous year. Hotels' revenue-per-available-room at Cairo city increased to reach US$ 72. As to regional comparison, table 2 shows that only Doha (Qatar), Amman (Jordan), Beirut (Lebanon) and Abu Dhabi (UAE) experienced negative results in revenues per available room (RevPar), while Cairo (Egypt) hotels witnessed positive change in the same indicator Chart(3): Number of Tourist Nights (In Thousands) Q1 Q2 Q3 Q4 2014/ / / / It can be calculated using the following two ways; (i) Total room revenue in a given period, net of discounts, sales tax, and meals, divided by the number of available rooms in same period. (ii) Average daily room rate multiplied by occupancy rate

15 Central Bank of Egypt External Position 9 Indicators of Tourism Activity Table (1): Indicators of Tourism Activity 2015/ / / / / /18 Q4 Q4 Q3 Q4 1. Tourism Receipts (USD mn) 3,768 4,380 9, ,539 2,271 2, Stay-over Visitors (x 1.000) 6,874 6,623 9,777 1,186 1,823 2,384 2, Market Shares (% of Tourist Arrivals) a. European Countries b. Middle East Countries c. African Countries d. Americas e. Asia & Pacific f. Other Countries Market Shares (% of Tourist Nights) a. European Countries b. Middle East Countries c. African Countries d. Americas e. Asia & Pacific f. Other Countries Visitor Nights (x 1.000) 51,779 50, ,557 6,645 17,448 23,760 26, Average Nights Spent (per Visitor) Receipts per Visitor Nights (USD/night) The Herfindahl-Hirschman Index Contribution to Current Receipts % Sources: CBE, MOT, and CAPMAS. Table (2): Hotels' Performance in key Arab Cities in First Seven Months of 2018 Country Occupancy RevPAR Rate (US$) Change % Cairo (Egypt) Manama (Bahrain) Amman (Jordan) Kuwait (Kuwait) Beirut (Lebanon) Doha (Qatar) Jeddah (Saudi Arabia) Abu Dhabi (UAE) Source: Ernst & Young benchmark survey of Middle East hotel sector.

16 Section III International Investment Position (IIP)

17 Central Bank of Egypt External Position 11 International Investment Position (IIP) At end of June 2018* Egypt s IIP at end of June 2018, recorded net external liabilities (assets minus liabilities) of about US$ billion, up by 12.4 percent compared to end of June US$ billion Chart (1) International Investment Position (IIP) End of June Sept. Dec. March June Assets Liabilities Net IIP Source: Appendix I, table (2). Egypt's preliminary IIP data at end of June 2018, showed an increase in both Egypt's total assets and liabilities compared to the position at end of June 2017, to record net liabilities of about US$ billion versus US$ billion. Assets and Liabilities by Component: 1-Assets increased by 17.9 percent to reach about US$ 78.2 billion at end of June 2018, from about US$ 66.4 billion at end of June Chart (2) Breakdown of Assets by Component Reserve assets 55.6% June 2018 Direct investment abroad 9.7% Other investments 32.9% Portfolio investment assets 1.8% The increase was mainly due to the following developments: - Reserve assets increased by 41.9 percent to about US$ 43.5 billion. - Foreign direct investments increased by 3.7 percent to about US$ 7.6 billion. - However, portfolio investments abroad & other investment assets decreased by 15.5 percent and 3.7 percent, respectively, to about US$ 1.4 billion and US$ 25.7 billion. * Released as of September 2009 according to SDDS requirements.

18 Central Bank of Egypt External Position Liabilities increased by 14.2 percent to about US$ billion at end of June 2018, from about US$ billion at end of June Chart (3) Breakdown of Liabilities by Component Other investments 34.7% Portfolio investment liabilities 14.9% June 2018 Direct investment in Egypt 50.4% Indicators: - Egypt s negative net IIP to GDP at end of June 2018 increased to about 58.9 percent, from about 55.8 percent at end of June % Chart (4) Egypt's Net IIP to GDP End of June Sept. Dec. March June The increase was mainly due to the following developments: - Portfolio investments in Egypt increased by 56.8 percent to about US$ 33.6 billion. - Other investment liabilities increased by 11.9 percent to about US$ 78.3 billion. - FDI in Egypt increased by 7.2 percent to about US$ billion. - Assets to liabilities increased to about 34.7 percent at end of June 2018, from about 33.6 percent at end of June % Chart (5) Egypt's IIP Assets/Liabilities End of June Sept. Dec. March June

19 Section IV External Liquidity

20 Central Bank of Egypt External Position 13 External Liquidity A-Net International Reserves (NIR) The CBE's decision to unpeg the Egyptian Pound led to the steady accumulation of foreign currency reserves through the formal channels. During FY 2017/2018, NIR remained on the rise, increasing by around US$ 13.0 billion (against US$ 13.8 billion a year earlier) to reach US$ 44.3 billion, thus covering 8.4 months of merchandise imports at end of June US$ bn Chart (1) : NIR & Months of Imports Covered (Balance at End of the Month) June 2015 June 2016 June 2017 June 2018 Foreign Currencies Loans to IMF Gold Reserves/Months of Imports Month The increase was a result of the rise in foreign currencies by about US$ 11.0 billion and in SDRs by US$ 2.0 billion. During the Report s preparation, NIR reached US$ 44.5 billion at end of October (US$ mn) End of June 2017 June 2018 Net International Reserves (1-2) Gross Official Reserves Gold SDRs Foreign Currencies Loans to IMF Reserve Liabilities 2 3 Reserves/Months of Imports B- Net Foreign Assets of Banks (NFA) Banks' net foreign assets decreased by US$ 2.7 billion during FY 2017/2018 (against a rise of US$ 8.0 billion a year earlier). US$ bn Chart (2): Foreign Assets & Liabilities of Banks (End of the Month) June 2015 June 2016 June 2017 June 2018 Assets Liabilities Net Foreign Assets

21 Central Bank of Egypt External Position 14 Foreign currency deposits with banks increased by 4.5 percent during the period concerned, reaching US$ 40.2 billion at end of June Likewise, local currency deposits 2000 increased by 27.4 percent. As such, 1500 the ratio of foreign currency deposits 1000 to total deposits made up 23.8 percent at end of June LE bn Chart (3): Developments in Deposits by Local and Foreign Currencies (End of the Month) June 2015 June 2016 June 2017 June 2018 Foreign Currency Deposits Local Currency Deposits Growth Rate of Foreign Currency Deposits Growth Rate of Local Currency Deposits %

22 Section V External Debt

23 Central Bank of Egypt External Position 15 External debt recorded US$ 92.6 billion at end of June 2018, up by 17.2 percent (compared with about US$ 79.0 billion at end of June 2017). This increase came as a result of the rise in net disbursements of loans and facilities by US$ 13.2 billion, alongside the depreciation of most currencies of borrowing versus the US dollar by US$ 0.4 billion. External Debt By residual maturity 1, medium- and long-term external debt decreased to represent 74.1 percent of the total debt. In comparison, they accounted for 86.7 percent of the total by original maturity. Meanwhile, shortterm debt showed an increase, as it represented 25.9 percent, compared to 13.3 percent classified by original maturity. A- Breakdown by Maturity By original maturity, external debt reaffirmed its usual pattern of longterm external debt predominance at end of June Long-term external debt accounted for US$ 69.0 billion or 74.5 percent of the total external debt, whereas mediumterm external debt reached US$ 11.3 billion or 12.2 percent and short-term external debt accounted for US$ 12.3 billion or 13.3 percent. External Debt by Residual Maturity at end of June 2018 (US$ million) 1. Short-term debt by original maturity Medium- & long-term debt maturing within one year External debt by residual maturity up to 1 year (1+2) Percentage to total external debt 25.9% Percentage to NIR 54.3% 4. Medium- & long-term debt by residual maturity Percentage to total external debt 74.1% Chart (1) External Debt Structure by Original Maturity End of June 2018 Short-term debt 13.3% Mediumterm debt 12.2% Long - term debt 74.5% 1 While the analytical presentation of external debt by original maturity is the norm recommended in the External Debt Statistics Guide, residual maturity presentation still draws significant attention. In other words, compilation of external debt statistics based on original maturity helps in understanding the nature of capital flows; while the remaining maturity provides a profile of debt service payments, especially those falling due in the near term, and of potential liquidity risks facing the economy. Short-term debt by residual maturity comprises all components of short-term debt with original maturity of up to one year, and the amounts falling due under medium- and longterm debt by original maturity within one year or less.

24 Central Bank of Egypt External Position 16 B- Breakdown by Type Medium- and long-term external debt increased by about US$ 13.6 billion to about US$ 80.3 billion (86.7 percent of total debt) at end of June 2018, of which: Rescheduled bilateral debt reached about US$ 3.7 billion or 4.0 percent of total debt. Other bilateral * debt amounted to about US$ 7.6 billion or 8.2 percent. Buyers' & suppliers' credit reached about US$ 8.4 billion or 9.1 percent of total debt. International and regional organizations' debt reached about US$ 28.4 billion or 30.7 percent of total debt. Government bonds and notes reached about US$ 14.3 billion or 15.4 percent of total debt. These include: (i) US$ 1.0 billion of sovereign notes issued in April 2010 and falling due in 2020 & 2040, (ii) US$ 11.1 billion of Eurobonds issued in June 2015, Jan. 2017, May 2017, and Feb (iii) US$ 2.2 billion of euro-dominated bonds issued in April 2018 and falling due in 2026 & Long-term deposits that have been placed at the CBE by some Arab countries posted US$ 17.4 billion (18.8 percent of total debt). Non-guaranteed debt of the private sector registered US$ million (about 0.5 percent of total debt). Short-term external debt increased by about US$ 9.3 million to about US$ 12.3 billion or 13.3 percent of total debt. Private sector (non guaranteed) 0.5% Internationl & regional organizations 30.7% Rescheduled bilateral debt 4.0% Chart (2) External Debt Structure End of June 2018 Long-term deposits 18.8% Other bilateral debt 8.2% Suppliers' & buyers' credits 9.1% C- Breakdown by Currency Short-term debt 13.3% Government bonnds & notes 15.4% Measuring the currency composition of Egypt's external debt is an important indicator that sheds light on the external debt exposure, to currency markets' volatility. The currency com-position of external debt indicates that the US dollar is the main borrowing currency, with a value of US$ 58.8 billion. This includes other outstanding obligations in US dollar to creditors other than the USA (such as the IMF, African Development Bank (AfDB), and the International Bank for Reconstruction and Development (IBRD). Including the Liquidity Support Facility (LSF) from China Development Bank (CDB) to CBE.

25 Central Bank of Egypt External Position 17 Other important currencies recorded US$ 32.0 billion distributed as follows: the euro was the runner-up (US$ 13.9 billion), followed by the Special Drawing Rights * (US$ 10.5 billion), the Chinese yuan (US$ 2.7 billion), the Kuwaiti dinar (US$ 2.5 billion), and the Japanese yen (US$ 2.4 billion). Chart (3) External Debt Structure by Currencies End of June 2018 Other Currencies 1.9% US Dollar 63.5% Japanese Yen 2.6% Euro 15.0% Kuwaiti Dinar 2.7% Chinese Yuan 2.9% SDRs 11.4% D- Breakdown by Creditor Debt distribution by creditor country indicates that US$ 28.4 billion was owed to international organizations** (mainly IMF US$ 9.3 billion, IBRD US$ 9.1 billion, ADF & AFDB US$ 2.6 billion, EIB US$ 2.4 billion and other institutions US$ 5.0 billion), and that US$ 23.1 billion was owed to Arab countries (mainly Saudi Arabia, UAE, and Kuwait). Meanwhile, US$ 14.7 billion came from five members of Paris Club countries; namely Germany (US$ 7.1 billion), Japan (US$ 2.3 billion), France (US$ 2.0 billion), UK (US$ 1.9 billion), and USA (US$ 1.4 billion). In addition, US$ 5.1 billion of the total debt was owed to China. E- Breakdown by Debtor The structure of Egypt s external debt by debtor reveals that: - Central and local government remains the main debtor, with a share of 51.4 percent of external debt at end of June Its debt increased by US$ 12.8 billion to amount to US$ 47.6 billion. - Banks' external debt increased by about US$ 2.0 billion to US$ 6.0 billion. - Other sectors' debt increased by about US$ 2.6 billion to US$ 12.4 billion. - However, the monetary authority's external debt decreased by about US$ 3.8 billion to US$ 26.6 billion at end of June (US$ bn) Arab countries 25.0% Government bonds & notes 15.4% Other Sectors Monetary Authority Chart (4) External Debt by Creditor End of June 2018 International & regional organizations 30.7% Germany 7.7% Chart (5) External Debt by Debtor End of June Banks USA 1.6% UK 2.0% China 5.5% Other countries 7.4% France 2.2% Japan 2.5% Central & Local Government Including Egypt s allocation of SDRs by the IMF. International Monetary Fund (IMF), International Bank for Reconstruction and Development (IBRD), European Investment Bank (EIB), African Development Fund (ADF), and African Development Bank (AfDB).

26 Central Bank of Egypt External Position 18 F- External Debt Indicators* The ratio of short-term external debt to net international reserves decreased to 27.8 percent at end of June 2018 (from 39.2 percent at end of June 2017). In addition, its ratio to total debt registered 13.3 percent (against 15.5 percent). As for the external debt in terms of international comparison, the debt is within manageable limits. Based on IMF classification, comparing Egypt's key debt indicators with those of other regional country groups ** shows that: - Egypt's debt stock to GDP represented 37.0 percent at end of June 2018 (65.1 percent for Emerging and Developing Europe and 44.7 percent for Latin America and the Carribean). - Egypt's short-term external debt to total external debt at end of June 2018 represented 13.3 percent (21.1 percent for Emerging and Developing Europe, and 14.2 percent for Latin America and the Carribean). * For more indicators, refer to appendix I, table No. 6. ** Source: World & Regional Economic Outlook Reports, Oct. 2018, and CBE database. *** Debt-Service Ratio: The ratio of debt service (interest and principal payments due) during a year, expressed as a percentage of exports (typically of goods and services) for that year. This ratio is considered to be a key indicator of a country s debt burden. - Egypt's debt-service ratio *** registered 28.0 percent during FY 2017/2018 (49.0 percent for Emerging and Developing Europe, and 42.0 percent for Latin America and the Caribbean). Debt service reached US$ 13.2 billion during FY 2017/2018 (US$ 11.1 billion for principal repayments and US$ 2.1 billion for interest payments). % % Chart (6) External Debt Indicators End of June Government External Debt / External Debt External Debt /GDP Short-term Debt / Net International Reserves Short-term Debt / Total External Debt External Debt Indicators During FY 2015/ / /2018 Debt Service/ Current Receipts (including transfers) Debt Service/ Exports of Goods and Services

27 Section VI Exchange Rate Developments

28 Central Bank of Egypt External Position 19 Exchange Rate Developments On the 3 rd of November 2016, the CBE took the decision of the liberalization of the Egyptian pound exchange rate, to be quoted according to the dynamics of supply and demand. This decision came as part of the economic reform program. (i) Inter-bank Rate 1 : During FY 2017/18, the weighted average of the US dollar in the Egyptian inter-bank market depreciated by 1.1 percent to record EGP at end of June 2018, (against EGP at end of June 2017). (ii) Market Rate: At end of June 2018, according to the foreign exchange market (buying price), Swiss franc decreased by 4.7 percent, US dollar, Saudi riyal, and UAE dirham by 1.1 percent each, and Kuwaiti dinar by 1.0 percent. On the other hand, Chinese yuan increased by 1.4 percent, euro by 1.0 percent, pound Sterling by 0.8 percent, and Japanese yen (100) by 0.5 percent. EGP Sep-16 Chart (1): Exchange Rates of USD & Euro against EGP Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun / /2018 USD Interbank rate(average) USD market rate(buying price) Euro market rate(buying price) 1 The inter-bank foreign exchange market was launched in Egypt in December 2004.

29 Section VII Statistics

30 Central Bank of Egypt External Position Appendix I Table Page I- Balance of Payments BOP Current Account BOP Capital and Financial Account (contd.). 24 II- International Investment Position (IIP) 2 25 III- Coordinated Portfolio Investment Survey (CPIS) 3 26 IV- External Liquidity NIR & NFA at Banks V- External Debt External Debt by Type External Debt Indicators. External Debt by Debtor. VI- Exchange Rate Developments Foreign Exchange Rates

31 Central Bank of Egypt - External Position 23 Table (1) Balance of Payments (US$ mn) Fiscal year 2016/2017* 2017/2018* Trade Balance Exports** Petroleum Other Exports Imports** Petroleum Other Imports Services Balance Receipts Transportation of which: Suez Canal Travel Government receipts Other Payments Transportation Travel Government Expenditures Other Income Balance Income receipts Income payments of which: Interest paid Transfers (Net) Private Transfers (Net) of which: Workers' Remittances Official Transfers (Net) Current Account Balance

32 Central Bank of Egypt - External Position 24 Table (1) Balance of Payments (contd.) (US$ mn) 2016/2017* 2017/2018* Capital & Financial Account Capital Account Financial Account Direct Investment Abroad Direct Investment in Egypt (Net) Portfolio Investment Abroad (Net) Portfolio Investment in Egypt (Net) of which: Bonds Other Investment (Net) Net Borrowing M&L-Term Loans (Net) Drawings Repayments MT-Suppliers' Credit (Net) Drawings Repayments ST-Suppliers' Credit (Net) Other Assets Central Bank Banks Other Other Liabilities Central Bank Banks Net Errors & Omissions Overall Balance Change in CBE Reserve Assets,Increase(-) * Preliminary. ** Include free zones exports and imports. Fiscal year

33 Central Bank of Egypt - External Position 25 Table (2) International Investment Position (IIP) (US$ mn) End of June 2017 June 2018 * Assets Liabilities Assets Liabilities Total Direct investment Portfolio investments Equity security Debt security Other investments Trade credits General government Long-term Short-term Other sectors Long-term Short-term Loans Monetary authorities Use of Fund credit & loans from the Fund Other long-term Short-term General government Long-term Short-term Banks Long-term Short-term Other sectors Long-term Short-term Currency and deposits Monetary authorities Long-term Short-term General government Long-term Short-term Banks Long-term Short-term Other sectors Long-term Short-term Other assets / Liabilities Monetary authorities Long-term Short-term General government Banks Other sectors Reserves assets * Preliminary.

34 Central Bank of Egypt - External Position 26 Table (3) Egypt's Coordinated Portofolio Investement Survey (CPIS) at end of June2018 Breakdown of portfolio investment Assets by country of residence of the Issuers (US$ mn) Country of non-resident issuers Equities long-term debt securities short-term debt securities Total Bahrain Belgium Canada China, P.R. Mainland Czech Republic Ethiopia France Germany Ghana Hong Kong India Indonesia Ireland Italy Japan Jordan kenya Kuwait Lebanon Luxembourg Malaysia Malta Netherlands New Zealand Nigeria Oman Pakistan Qatar Russian Federation Saudi Arabia Singapore Spain Syrian Arab Republic Sudan Sweden Switzerland Tunisia United Arab Emirates United Kingdom United States International Organizations Total

35 Table (4) Net International Reserves & Net Foreign Assets at Banks (US$ mn) End of June Net International Reserves (1-2) Gross Official Reserves Gold SDRs Foreign Currencies Loans to IMF Central Bank of Egypt - External Position 2- Reserve Liabilities Banks' Net Foreign Assets Assets Liabilities

36 Table (5) External Debt by Type End of June Total External Debt* Medium & Long term debt : Rescheduled bilateral debt ** ODA Non-ODA Other bilateral debt Paris Club countries Other countries International & regional organizations Suppliers' & buyers' credits Egyptian bonds and notes Long- term deposits Private sector debt (non-guaranteed) Short-term debt Currency & deposits Other short-term facilities Source: Central Bank of Egypt. + Provisional ++ Liquidity Support Facility (LSF) has been moved to Other bilateral debt (other countries), instead of suppliers' & buyers' credit. * The difference from World Bank data. ** According to the agreement signed with Paris Club countries on May 25, (US$ mn) Central Bank of Egypt - External Position 28

37 Table (6) External Debt Indicators FY 2013/ / / / / External Debt /GDP* (at current market prices) % External Debt / Exports (G&S) (annually) % Short-term Debt / External Debt % Short-term Debt / Net International Reserves % Debt Service ** (Principal & Interest) (US$ mn.) Debt Service / Exports (G&S) % Debt Service / Current Receipts % Interest / Exports (G&S) % External Debt per Capita (US$) Provisional * The annual GDP is calculated in US dollar by having the sum total of the quarterly GDP released by the Ministry of planning, Monitoring and Adminstrative Reform after being evaluated in US dollar based on the average exchange rate for each quarter. ** Includes interest payments on US dollar-denominated bonds and notes holding by nonresidents Central Bank of Egypt - External Position 29

38 Central Bank of Egypt - External Position 30 Table (7) External Debt by Debtor (US$ mn) End of June 2017 % June 2018 * % Change +/ (-) % External Debt Total Medium- & Long-Term Total Short-Term Central & Local Government Medium- & Long-Term Bonds & Notes Loans Currency and Deposits Other Liabilities Short-Term Money Market Instruments Loans Currency and Deposits Other Liabilities Monetary Authority (3764.0) (12.4) Medium- & Long-Term (1901.8) (8.6) Bonds & Notes Loans (780.1) (33.1) Currency and Deposits (1137.4) (6.1) Other Liabilities Short-Term (1862.2) (22.7) Money Market Instruments Loans (1725.3) (32.3) Currency and Deposits (136.9) (4.8) Other Liabilities Banks Medium- & Long-Term Loans Bonds & Notes Loans Currency and Deposits Other Liabilities Short-Term Loans Money Market Instruments Loans Currency and Deposits Other Liabilities Other Sectors Medium- & Long-Term Loans from Direct Investors Bonds & Notes Trade Credits Loans Currency and Deposits Other Liabilities Short-Term Loans from Direct Investors Money Market Instruments Trade Credits Loans Currency and Deposits Other Liabilities * Provisional.

39 Table (8) Foreign Exchange Rates (In LE per foreign currency unit ) End of June 2017 June 2018 First: Interbank Rates * Weighted average Second : Market Rates Buy Sell Buy Sell US Dollar Euro Pound Sterling Swiss Franc Japanese Yens Saudi Riyal Kuwaiti Dinar UAE Dirham Chinese Yuan Source: CBE daily exchange rates. * The interbank rates were launched on December 23, Central Bank of Egypt - External Position 31

40 Central Bank of Egypt External Position I- Outstanding External Debt Appendix II Table Outstanding Stock Outstanding Stock by Creditor Country Medium- and Long-Term Public & Publicly Guaranteed External Debt By Creditor: a. Rescheduled Debt b. Non-Rescheduled Debt c. Multilateral Institutions d. Bonds & Notes e. Deposits Medium- and Long-Term Private Sector Non-Guaranteed External Debt by Creditor Country Short-Term External Debt II- Outstanding External Debt by Currency III- Disbursed and Undisbursed Amounts for Signed Loans & Deposits IV- Projected Medium- and Long-Term Public and Publicly Guaranteed External Debt Service a- Rescheduled Debt b- Non-Rescheduled Debt c- Multilateral Institutions d- Bonds & Notes: - Sovereign Notes Eurobonds Issued in USD Eurobonds dominated in EUR Currency e- Deposits - Medium- and Long-Term Deposits for Kuwait Medium- and Long-Term Deposits for Saudi Arabia Medium- and Long-Term Deposits for United Arab Emirates V- Projected Short-Term Debt VI- Exchange Rates of the Currencies of External Debt Versus US Dollar Page

41 Central Bank of Egypt - External Position 35 (US$ million) Total Debt Medium-and Long-Term Public & Publicly Guaranteed Debt 45, , , , A. Rescheduled Debt 6, , , , B. Non Rescheduled Debt 7, , , , C. Multilateral Institutions 12, , , , D. Bonds &Notes 4, , , , Sovereign Notes , Euro-bond issued in US$ 1, , , , Euro-bond dominated in EUR currency , Euro-Medium Term Notes ( E.M.T.N.) 1, , Saudi Bond Guaranteed Notes 1, E. Deposits 15, , , , Medium and Long-Term Private Sector Non-Guaranteed Short-Term Debt 2, , , , Currency and Deposits (Non-Residents) 1, , , , Trade Credits 1, , , , Loans , , Repo , , Grand Total 48, , , , Using end of period exchange rate. (1) Includes US$ 8, million buyer credits and US$ 1,000 million representing China facility agreement and US$ 5.18 million Supplier credits. (2) Includes US$ 8, million representing extended fund facility by IMF ( First Tranch amounted SDR 1, million, Second Tranch amounted SDR million, Third Tranch amounted SDR 1, million and Fourth Tranch amounted SDR 1, million) and US$ 1, million representing SDR allocation by IMF to its member countries, Egypt s share is SDR million. (3) Representing Euro-bond with nominal value US$ 12,500 million (non-residents' subscriptions amounted US$ 11, million). (4) Representing Euro-bond dominated in EUR currency with nominal value EUR 2,000 million (non-residents' subscriptions amounted US$ 2, million). (5) Representing Saudi, United Arab Emirates, & Kuwait deposits amounted US$ 7500, 5900 and 4000 million respectively. (6) Includes US$ million representing Chinese Currency Swap Arrangement. Figure 1-1 Table ( 1 ) Outstanding Stock as at End of June External Debt Outstanding Stock as at End of June (1) (2) (3) (4) (5) (6) ( US$bn )

42 Figure 1-2 Short-Term Debt 13.26% Outstanding Stock as at End of June 2018 Private Sector Non- Guaranteed 0.50% Rescheduled Debt 4.02% Central Bank of Egypt - External Position Non Rescheduled Debt 17.36% Multilateral Institutions 30.67% Deposits 18.78% Bonds & Notes 15.41% 36

43 Central Bank of Egypt - External Position 37 Table ( 2 ) Outstanding Stock as at End of June Creditor Countries (US$ million) (1) Total Debt Germany 2, , , , Japan 2, , , , China , , , France 1, , , , United States 2, , , , Saudi Arabia Kuwait Italy United Arab Emirates United Kingdom Spain Bahrain Belgium Denmark Austria The Netherlands Canada Qatar Switzerland Finland Norway Sweden Turkey 1, Australia Multilateral Institutions (2) 12, , , , Deposits, Bonds and Notes Deposits 15, , , , Saudi Arabia 5, , , , United Arab Emirates 4, , , , Kuwait 4, , , , Libya 2, , , African Export-Import Bank Bonds & Notes 4, , , , Sovereign Notes , Euro-bond issued in US$ 1, , , , Euro-bond dominated in EUR currency , Euro-Medium Term Notes ( E.M.T.N.) Saudi Bond Guaranteed Notes 1, Medium and Long-Term Private Sector Non-Guaranteed Short-Term Debt 2, , , , African Export - Import Bank , , Currency Swap Agreement (China) , , REPO Transactions , , Arab Trade Financing Program Others 2, , , , Grand Total (1) Using end of period exchange rate.

44 Figure 2 Bonds &Notes 15.41% Japan 2.42% Germany 7.53% Outstanding Stock as at End of June 2018 China 2.31% Deposits 18.78% France 1.80% Others 7.82% Multilateral Institutions 30.67% Short-Term Debt 13.26% Central Bank of Egypt - External Position 38

45 Central Bank of Egypt - External Position 39 Table ( 3 ) Medium and Long-Term Public & Publicly Guaranteed External Debt By Creditor Country Rescheduled Debt Outstanding Stock as at End of June Country Total Debt (US$ million) (1) Germany 1, , , , Japan 1, , , , United States 1, , , France Spain The Netherlands Denmark Italy Canada Austria United Kingdom Switzerland Belgium Norway Sweden Australia Grand Total 6, , , , (1) Using end of period exchange rate. Figure 3 Medium and Long-Term Public & Publicly Guaranteed External Debt Rescheduled Debt Outstanding Stock as at End of June 8.0 ( US$bn )

46 Central Bank of Egypt - External Position 40 Table ( 4 ) Medium and Long-Term Public & Publicly Guaranteed External Debt By Creditor Country Non-Rescheduled Debt Outstanding Stock as at End of June Country Total Debt (US$ million) (1) Germany 1, , , , China , , , France , Japan , , Saudi Arabia Kuwait Italy United Arab Emirates United Kingdom United States Bahrain Spain Belgium Austria Denmark Qatar Switzerland Canada Finland Turkey 1, Sweden Grand Total 7, , , , (1) Using end of period exchange rate. Figure 4 Medium and Long-Term Public & Publicly Guaranteed External Debt Non-Rescheduled Debt Outstanding Stock as at End of June 20.0 ( US$bn )

47 Central Bank of Egypt - External Position 41 Table ( 5 ) Medium and Long-Term Public & Publicly Guaranteed External Debt Multilateral Institutions Outstanding Stock as at End of June Creditor (US$ million) (1) Total Debt IMF (2) 1, , , , IBRD 4, , , , European Investment Bank 1, , , , African Development Bank 1, , , , Arab Fund for Economic and Social Development 1, , , , I.D.A Arab Monetary Fund Islamic Development Bank African Export - Import Bank European Bank For Reconstruction and Development OPEC Fund International Islamic Trade Finance Corporation Arab Petroleum Investments Corporation (APICORP) African Development Fund International Fund for Agricultural Development Clean Technology Fund Green Fund Islamic Corporation for Development Arab Trade Financing Program Grand Total 12, , , , (1) Using end of period exchange rate. (2) Includes SDR allocations by IMF to its member countries; Egypt s share is SDR MN. Figure 5-1 Medium and Long-Term Public & Publicly Guaranteed External Debt Multilateral Institutions Outstanding Stock as at End of June ( US$bn )

48 Figure 5-2 IBRD 32.00% African Development Bank 8.46% Islamic Development Bank 1.96% African Export - Import Bank 1.42% Medium and Long-Term Public & Publicly Guaranteed External Debt Multilateral Institutions Outstanding Stock as at End of June AMF 2.02% Others 5.09% IMF 32.78% I.D.A 2.36% European Investment Bank 8.51% Arab Fund for Economic and Social Development 5.40% Central Bank of Egypt - External Position 42

49 Central Bank of Egypt - External Position 43 Table ( 6 ) Bonds & Notes Outstanding Stock as at End of June Total Debt (US$ million) Euro-bond issued in US$ 1, , , , Euro-bond dominated in EUR currency , Sovereign Notes , Saudi Bond Euro-Medium Term Notes ( E.M.T.N.) 1, , Guaranteed Notes 1, Grand Total 4, , , , Figure 6 Bonds & Notes Outstanding Stock as at End of June ( US$bn )

50 Central Bank of Egypt - External Position 44 Table ( 7 ) Medium and Long-Term Deposits Outstanding Stock as at End of June Country Total Debt (US$ million) Saudi Arabia 5, , , , United Arab Emirates 4, , , , Kuwait 4, , , , Libya 2, , , African Export-Import Bank Grand Total 15, , , , Figure 7 Medium and Long-Term Deposits Outstanding Stock as at End of June 20 ( US$bn )

51 Central Bank of Egypt - External Position 45 Table ( 8 ) Medium and Long-Term Private Sector Non-Guaranteed External Debt By Creditor Country Outstanding Stock as at End of June Country Total Debt (US$ million) (1) Multilateral Institutions Kuwait Germany France Bahrain Grand Total (1) Using end of period exchange rate. Figure 8 Medium and Long-Term Private Sector Non-Guaranteed External Debt Outstanding Stock as at End of June ( US$mn )

52 Central Bank of Egypt - External Position 46 Table ( 9 ) Short-Term External Debt Outstanding Stock as at End of June Total Debt (US$ million) (1) Currency and Deposits (Non-Residents) 1, , , , (2) Trade Credits 1, , , , Repo , , Loans , , Grand Total 2, , , , (1) Using end of period exchange rate. (2) Includes US$ 2, million representing Chinese Currency Swap Figure 9 Short-Term Debt Outstanding Stock as at End of June ( US$bn )

53 Central Bank of Egypt - External Position 47 Table ( 10 ) Outstanding Stock as at End of June (US$ million) (*) Currency Total Debt US Dollar 33, , , , EURO 6, , , , Special Drawing Rights 2, , , , Chinese Yuan , , Kuwaiti Dinar 2, , , , Japanese Yen 2, , , , Saudi Riyal Egyptian Pound Swiss Franc Danish Kroner Canadian Dollar U.A.E. Dirham British Pound Sterling Norwegian Kroner Swedish Kroner Australian Dollar Total 48, , , , (*) Using end of period exchange rate.

54 Central Bank of Egypt - External Position 48 Table ( 11 ) Medium and Long-Term Disbursed and Undisbursed Amounts for Signed Loans and Deposits from 1/7/2015 to 30/6/2018 Signed Amount Disbursed Undisbursed 1- Medium and Long-Term Public & Publicly Guaranteed Debt 37, , , A. Non-Rescheduled Debt 14, , , B. Multilateral Institutions 18, , , C. Deposits 5, , Medium and Long-Term Private Sector Non-Guaranteed Debt Grand Total 38, , , (1) Using end of period exchange rate. Figure 11 Medium and Long-Term Disbursed and Undisbursed Amounts for Signed Loans and Deposits from 1/7/2015 to 30/6/2018 (US$ million) (1) ( US$mn ) 20, , , , , , , , , , Non-Rescheduled Debt Multilateral Institutions Deposits Private Sector Non- Guaranteed Debt Signed Amount Disbursed Undisbursed

55 Central Bank of Egypt - External Position 49 Period Principal Interest Total Period Principal Interest Total 2018/H , /H /H , /H /H , /H /H , /H /H , /H /H , /H /H , /H /H , /H /H , /H /H , /H /H , /H /H , /H /H , /H /H , /H /H , /H /H , /H /H , /H /H , /H /H , /H /H , /H /H , /H /H , /H , /H /H /H , /H , /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H Grand Total 78, (2) 23, (3) 102, (1) The exchange rate of June 30, Table ( 12 ) Projected Medium and Long-Term Public & Publicly Guaranteed External Debt Service as of July 1, 2018 (2) Excludes US$ million representing SDR allocation by IMF to its member countries, Egypt s share is SDR million. (3) Includes US$ million representing forecast interest of SDR allocation. (US$ million) (1)

56 Figure 12 US$ mn 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Medium and Long-Term Public and Publicly Guaranteed External Debt Service as of July 1, 2018 Principal Interest Total Central Bank of Egypt - External Position 50

57 Central Bank of Egypt - External Position 51 Table ( 13 ) Projected Medium and Long-Term Public & Publicly Guaranteed External Debt Service as of July 1, 2018 Rescheduled Debt Period Principal Interest Total Period Principal Interest Total 2018/H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H (US$ million) (1) Grand Total 3, , (1) The exchange rate of June 30, 2018.

58 Central Bank of Egypt - External Position 52 Period Principal Interest Total Period Principal Interest Total 2018/H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H Grand Total 16, , , (1) The exchange rate of June 30, Table ( 14 ) Projected Medium and Long-Term Public & Publicly Guaranteed External Debt Service as of July 1, 2018 Non-Rescheduled Debt (US$ million) (1)

59 Central Bank of Egypt - External Position 53 (US$ million) (1) Period Principal Interest Total Period Principal Interest Total 2018/H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H Grand Total 27, (2) 5, (3) 32, (1) The exchange rate of June 30, Table ( 15 ) Projected Medium and Long-Term Public & Publicly Guaranteed External Debt Service as of July 1, 2018 Multilateral Institutions (2) Excludes US$ 1, million representing SDR allocations by IMF to its member countries; Egypt s share is SDR million. (3) Includes US$ million representing forecast interest of SDR allocation.

60 Figure 15 US$ mn Total Medium and Long-Term Public and Publicly Guaranteed External Debt Service Multilateral Institutions as of July 1, Principal Interest Total Central Bank of Egypt - External Position 54

61 Central Bank of Egypt - External Position 55 Period Principal Interest Total Period Principal Interest Total 2018/H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H Grand Total 1, , (*) Consists of Two Notes Table ( 16 ) Projected Sovereign Notes (*) Debt Service as of July 1, 2018 The Sovereign Note Nominal Value Amounted US$ 1000 MM, Interest Rate is Fixed 5.75 % issued on 29/4/2010 and due on 29/4/2020. The Sovereign Note Nominal Value Amounted US$ 500 MM, Interest Rate is Fixed % issued on 30/4/2010 and due on 30/4/2040. (US$ million)

62 Central Bank of Egypt - External Position 56 Table ( 17 ) Projected Euro-Bond issued in USD (*) Debt Service as of July 1, 2018 (US$ million) Period Principal Interest Total 2018/H /H /H /H /H /H /H /H1 2, , /H /H1 1, , /H /H /H /H , /H /H /H /H1 1, , /H /H1 1, , /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H /H1 2, , /H /H1 1, , Grand Total 11, , , (*) Euro Bond Nominal Value Amounted US$ 12,500 MM, detailed as: US$ 1500 MM issued on 11/6/2015 and due on 11/6/2025 with Fixed Interest Rate 5.875% US$ 2500 MM (US$ 1750 MM issued on 31/1/2017 and US$ 750 MM issued on 31/5/2017) due on 31/1/2022 with Fixed Interest Rate 6.125% US$ 2000 MM (US$ 1000 MM issued on 31/1/2017 and US$ 1000 MM issued on 31/5/2017) due on 31/1/2027 with Fixed Interest Rate 7.50% US$ 2500 MM (US$ 1250 MM issued on 31/1/2017 and US$ 1250 MM issued on 31/5/2017) due on 31/1/2047 with Fixed Interest Rate 8.50% US$ 1250 MM issued on 21/2/2018 and due on 21/2/2023 with Fixed Interest Rate 5.577% US$ 1250 MM issued on 21/2/2018 and due on 21/2/2028 with Fixed Interest Rate 6.588% US$ 1500 MM issued on 21/2/2018 and due on 21/2/2048 with Fixed Interest Rate 7.903%

63 Central Bank of Egypt - External Position 57 Table ( 18 ) Projected Euro-Bond dominated in EUR currency (*) Debt Service as of July 1, 2018 (US$ million) Period Principal Interest Total 2019/H /H /H /H /H /H /H /H /H /H /H /H /H /H /H1 1, , /H /H /H /H /H /H /H /H1 1, , Grand Total 2, , , (*) Euro Bond dominated in Euro currency with Nominal Value Amounted EUR 2000 MM equivilant to US$ 2316 MM detailed as: US$ 1158 MM issued on 16/4/2018 and due on 16/4/2026 with Fixed Interest Rate 4.750% US$ 1158 MM issued on 16/4/2018 and due on 16/4/2030 with Fixed Interest Rate 5.625%

64 Central Bank of Egypt - External Position 58 Table ( 19 ) Projected Medium and Long-Term Deposits for Kuwait as of July 1, 2018 (US$ million) Period Principal Interest Total 2018/H2 2, , /H1 1, , /H /H Grand Total 4, (*) , (*) Consists of Two Deposits : The First Deposit Amounted US$ 2000 MM, Interest Rate is Libor 12 months deposited on 24/9/2013 and due on 21/9/2018 Interest Paid on annual basis. The Second Deposit Amounted US$ 2000 MM, Interest Rate is Fixed 2.50 % deposited on 21/4/2015 and due on 22/4/2019, 23/4/2019 and 22/4/2020 (Three installments) Interest Paid on Semi-annual basis.

65 Central Bank of Egypt - External Position 59 Table ( 20 ) Projected Medium and Long-Term Deposits for Saudi Arabia as of July 1, 2018 Period Principal Interest Total (US$ million) 2018/H /H /H2 5, , /H /H /H Grand Total 7, (*) , (*) Consists of Five Deposits : The First Deposit Amounted US$ 1000 MM (Outstanding is US$ 500 MM), Interest Rate is Libor 3 months deposited on 9/5/2012 and due from 9/11/2018 up to 9/11/2020 (Equal 5 semiannual installments, USD 100 MM). The Second Deposit Amounted US$ 2000 MM, Interest Rate is Fixed 3.00% deposited on 19/7/2013 and due on 19/7/2019. The Third Deposit Amounted US$ 2000 MM, Interest Rate is Fixed 2.50 % deposited on 22/4/2015 and due on 22/4/2019, 22/4/2020 and 22/4/2021 (Three installments) Interest Paid on Semi-annual basis. The Fourth Deposit Amounted US$ 3000 MM, Interest Rate is Fixed 4.50 % (2000 MM deposited on 23/9/2016 and 1000 MM deposited on 16/5/2017) and due on 1/7/2019 Interest Paid on Quarterly-annual basis.

66 Central Bank of Egypt - External Position 60 Table ( 21 ) Projected Medium and Long-Term Deposits for United Arab Emirates as of July 1, 2018 (US$ million) Period Principal Interest Total 2018/H /H1 1, , /H /H1 1, , /H /H1 1, , /H2 1, , /H /H /H /H2 1, , Grand Total 5, (*) , (*) Consists of Four Deposits : The First Deposit Amounted US$ 1000 MM, Interest Rate is Fixed 3.00 % deposited on 17/7/2013 and due on 15/7/2021, Interest Paid on Semi-annual basis The Second Deposit Amounted US$ 1000 MM, Interest Rate is Fixed 3.50 % deposited on 17/7/2013 and due on 17/7/2023, Interest Paid on Semi-annual basis The Third Deposit Amounted US$ 2000 MM, Interest Rate is Fixed 3.00 % for US$ million deposited on 22/4/2015 and due on 20/4/2021, and Interest Rate is Fixed 2.50 % for US$ MM deposited on 22/4/2015 and due on 22/4/2019 and 22/4/2020 (Two installments) Interest Paid on Semi-annual basis. The Fourth Deposit Amounted US$ 1000 MM, Interest Rate is Fixed 2.50 % deposited on 31/5/2016 and due on 30/5/2019, 30/5/2020 and 30/5/2021 (Three installments) Interest Paid on Semi-annual basis. The Fifth Deposit Amounted US$ 1000 MM (Outstanding is US$ 900 MM), Interest Rate is Fixed 4.00 % deposited on 31/8/2016 and due on 31/8/2022 Interest Paid on monthly basis.

67 Central Bank of Egypt - External Position 61 Table ( 22 ) Projected Short-Term Debt Debt Service as of July 1, 2018 (US$ million) (1) Period Principal Interest Total July , , August , , September October November , , December , , January February March April May June Grand Total 12, , (1) The exchange rate of June 30, 2018.

68 Central Bank of Egypt - External Position 62 Table ( 23 ) Exchange Rates of the Currencies of External Debt Versus US Dollar as at End of June Country Currency United States USD Switzerland CHF Denmark DKK Egypt EGP Sweden SEK Japan JPY India INR United Kingdom GBP Canada CAD Australia AUD Norway NOK Euro EURO Special Drawing Rights SDR Kuwait KWD United Arab Emirates AED Saudi Arabia SAR Chinese Yuan CNY

69 Central Bank of Egypt External Position Appendix III Box Page I- Egypt's Subscription to SDDS and Data Quality Dimensions 1 65 II- Egypt's Data Quality Dimensions III- Doing Business in Egypt 3 67 IV- Tourism Market Diversification Glossary. 69

70 Central Bank of Egypt External Position 65 Box. (1): Egypt's Subscription to SDDS and Data Quality Dimensions: In 1996, the International Monetary Fund (IMF) introduced the Special Data Dissemination Standards (SDDS). The SDDS is intended to guide countries that have, or seek to have, access to international capital markets in their provision of economic and financial statistics. Subscription to SDDS is voluntary and it requires subscribers to observe the standard and provide information on data and dissemination practices (the metadata) to the IMF for redissemination. The standard identifies 4 dimensions of data dissemination: coverage, periodicity, and timeliness; access by the public; the integrity of the disseminated data; and the quality of the data themselves. In particular, the data dimension lists 18 data categories, providing coverage for 4 sectors (real, financial, fiscal and external) of the economy and prescribes minimum timeliness and frequency standard, summarized in table below. On January 31, 2005, Egypt became the 59th subscriber to the International Monetary Fund's Special Data Dissemination Standard (SDDS). The report of External Position contains external sector data that cover external debt, balance of payments, international reserves, merchandise trade, international investment position (IIP) and exchange rates. Such data are published in compliance with the requirement under Special Data Dissemination Standards (SDDS) of the IMF. Central Bank of Egypt compiles these statistics and disseminates them through press releases, its website, and at the same time, on the IMF's Dissemination Standard Bulletin Board (DSBB). Also, these data are included in the CBE's main publications; quarterly Economic Review, Annual Report and monthly Bulletins. As the title indicates, the most comprehensive and complete databases are those available from national sources, supplying high quality, timely and accurate data to international financial community to support investment activity. SDDS Data Categories and Related Periodicity & Timeliness Standards SDDS Data Category Periodicity Minimum Timeliness Real Sector National accounts Quarterly 1 Quarter Production indices Monthly 6 Weeks Employment, unemployment, wage/earnings Quarterly 1 Quarter Consumer price index Monthly 1 Month Fiscal Sector General Government operations Annual 2 Quarters Central Government operations Monthly 1 Month Central Government debt Quarterly 1 Quarter Financial Sector Analytical accounts of the banking sector Monthly 1 Month Analytical accounts of the Central Bank Monthly 2 Weeks Interest rates and stock market Daily 1 Day External Sector Balance of payments Quarterly 1 Quarter International reserves Monthly 1 Week Merchandise trade Monthly 8 Weeks International investment position (IIP) Quarterly 1 Quarters External debt Quarterly 1 Quarter Exchange rates Daily 1 Day Source: IMF Statistics Department. 1

71 Central Bank of Egypt External Position 66 Box. (2):Egypt's Data Quality Dimensions*: According to international rating agencies, having an efficient, effective and reliable economic data, especially in developing countries, is becoming increasingly crucial to assign an appropriate sovereign credit rating. Thus, a lack of data in this area will automatically translate into a perception of high risk. Therefore, highlighting the dimensions of Egypt data quality by showing the results of World Bank index (BBSC 2017) will be an appropriate way to show how reliable the Egyptian official data are. Egypt ranked 25 th on World Bank's Bulletin Board on Statistical Capacity index on 146 developing countries and 1st on the MENA and African regions, with an overall statistical capacity index of 83.3 points, compared to 87.8 in Statistical Capacity Indicator 2017 (on a scale of 0-100) Indicator Egypt All Countries Overall Methodology Source Data Periodicity & timeliness A country's statistical capacity means its ability to extract and publish reliable and timely statistical data, easily accessible by the public. The statistical capacity index, issued annually by the World Bank, consists of three sub-indicators which include; methodology, data sources, and its periodicity and timeliness. The latter measures the degree of information and data dissemination concerning changes in government policy, and how easily that information can be accessed by the public. It is worth mentioning that, aiming to improve the statistical capacity of 146 developing countries, the World Bank provides information on various aspects of national statistical systems through the BBSC indicator at its website. As can be seen from the table and its chart, Egypt s score outpaced the average score of all countries, either on the level of the overall index, or on the level of its three sub-indicators. * Source: bbsc.worldbank.org, accessed in November, 2018.

72 Central Bank of Egypt External Position 67 Box. (3): Doing Business in Egypt: One of the most important indices and reports that is closely related to investment climate and investor s decisions is Doing Business. The Report has been designed and issued by the World Bank Group on an annual basis since It provides objective measures of business regulations for firms in 190 economies worldwide. The 2018 ranking on the ease of doing business is built upon indicator sets that measure and benchmark regulations affecting 10 areas in a business s life cycle. Doing Business encompasses 2 types of data. The first is Legal scoring indicators that provides a measure of legal provisions in the laws and regulations. The other type is Time and motion indicators, which measures the efficiency and complexity in achieving a regulatory goal by recording the procedures, time and cost to complete a transaction according to all relevant regulations. By comparing business regulation environments across nations (the ease of doing business ranking) and over time (the distance to frontier score), Doing Business encourages countries to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves as a resource for policymakers and other interested parties. Topic Rankings 2019 Rank 2018 Rank Change in Rank Overall index Distance to frontier score* Starting a Business Dealing with Construction Permits Getting Electricity Registering Property Getting Credit Protecting Investors Paying Taxes Trading Across Borders Enforcing Contracts Resolving Insolvency * The rankings are determined by sorting the aggregate distance to frontier scores on 10 topics. Area of Reform Year Reform Actions The minimum capital required to start a business was cut from EGP 50,000 to EGP 1,000, 2008 and halved start-up time and cost. It was made easier by reducing the paid-in minimum capital requirement by more than 80%, 2009 abolishing bar association fees, and automating tax registration The minimum capital required to start a business was removed. Starting a Business 2011 Egypt reduced the cost to start a business. It was made easier by merging procedures at the one-stop shop by introducing a follow-up 2017 unit in charge of liaising with the tax and labor authority on behalf of the company. It was made easier by removing the requirement to obtain a bank certificate and establishing 2019 a one-stop shop The cost of dealing with licenses was reduced. Dealing with Construction Permits 2009 A new building code introduced in 2008 is aimed at reducing the procedures and time required to deal with construction permits by establishing a single window for processing construction-related approvals. Construction permits were made easier by issuing executive articles for the construction law and eliminating most pre-approvals for construction permits. Enforcing Contracts 2010 Contract enforcement was expedited with the creation of commercial courts. Thanks to new regulations issued by the Central Bank, borrowers have the right to inspect 2009 their data in the private credit bureau. Getting Credit Access to credit information has expanded with the addition of retailers to the database of 2010 the private credit bureau. Egypt strengthened access to credit by introducing the possibility of granting a nonpossessory security right in a single category of movable assets without requiring a 2019 specific description of the collateral. Secured creditors are now given absolute priority over other claims, such as labor and tax, both outside and within bankruptcy proceedings Registering property was reduced from 3% of the property value to a low fixed fee. Registering Property Simplified administrative procedures for registering property and new time limits have 2009 reduced the time to transfer property in Cairo from 193 days to 72. New one-stop shops were launched for traders at the ports, cutting the time to import by days and the time to export by 5. Alexandria port continued to upgrade its facilities and speed customs clearance, reducing the Trading Across Borders 2009 time to export by 1 day and the time to import by 3. Egypt made trading easier by introducing an electronic system for submitting export and 2011 import documents. New listing rules for the Cairo Stock Exchange strengthened protections for minority 2009 shareholders: now an independent body must assess transactions between interested parties before they are approved. Protecting Minority Investors 2015 Additional requirements have been introduced to strengthen minority investor protections; An approval of related-party transactions and greater requirements for disclosure of such transactions to the Egyptian Exchange by barring subsidiaries from acquiring shares issued by their parent company. by increasing shareholder rights and role in major corporate decisions and by clarifying 2017 ownership and control structures by increasing shareholder rights and role in major corporate decisions strengthened minority investors protections by increasing corporate transparency. Paying Taxes 2019 by extending value added tax cash refunds to manufacturers in case of a capital investment. Resolving Insolvency 2019 Source: accessed in November by introducing the reorganization procedure, allowing debtors to initiate the reorganization procedure and granting creditors greater participation in the proceedings.

73 Central Bank of Egypt External Position 68 Box. (4):Tourism Market Diversification: Since the year 2003/2004, a shift towards concentration has been noticed in Egypt s tourism market, as the European region was getting more dominance in terms of market share, pushing the degree of the Herfindahl-Hirschman Index (HHI 1 ) to exceed The HHI Index was applied to measure the degree of diversification within Egypt's tourism market over the 1989/ /18 period. As can be observed from the following chart, despite the HHI has been fluctuating, it took an upward trend over the entire period, from 0.31 in 1989/90 to 0.60 in 2013/2014. However. It started to drop since 2014/15 till it reached 0.35 in 2016/17 but it hiked again to 0.41 in 2017/18. This still indicates a continued market diversification during the last three years. This corresponds to the trends reflected in tourism data: a significant increase in number of incoming visitors from European countries and Asia & Pacific and a slight decrease of tourists from other regions, especially from Africa and the Americas. Such downward trend of the HHI index still sheds light on the necessary steps and incentives that are much needed to diversify Egypt's tourism market much more. Such diversification could mitigate tourism demand shocks. Nevertheless, the HHI index never exceeded 0.6, indicating more diversified tourism market, especially when compared to some of neighboring countries in the MENA region. Market Shares of Tourist Arrivals (1989/ /2018): 1 The Herfindahl-Hirschman Index, which traditionally a measure of concentration within industries, is specified in formula as: n, Where i is a particular origin country, n is the total number of origin countries, and xi is the total n 2 HHI Xi / Xi number of visitors from origin country i. The value of HHI will fall between 0 and 1. It will be 1 if visitors to Egypt are completely concentrated in one origin country and will approach 0 as the tourist origins become more diversified. i 1 i 1