The central bank has also issued a new presentation of budget data, based on IMF-approved models. The new budget system has had the effect of reducing the overall deficit in the past three years, because of the inclusion of surpluses on state social insurance funds (SIFs). However, the deficit has been steadily rising, albeit from a lower base (MEED 8:2:02).

The overall position on the balance of payments registered a $925 million deficit in the second quarter of fiscal 2001/02 (October-December). Total foreign exchange reserves fell by a corresponding amount to $14,100 million. The figures are affected by the inflow of $1,500 million in the capital account in the first quarter as a result of the issue of Egypt's debut Eurobond.

The current account deficit for the second quarter was $358 million, compared with $21 million in July-September. Tourism income dropped to $587 million from $1,146 million in the previous quarter, as a result of the 11 September events. This loss of hard currency inflows was partly offset by a 12 per cent fall in imports to $3,603 million.

The new budget system was first announced by the Finance Ministry in February, and is aimed at providing a more complete picture of the state's fiscal operations. The government now presents three budget lines. The first corresponds with previous budget reporting, and is confined to direct government revenues and expenditure. The second line adds in the operations of the National Investment Bank and subsidies agency the General Authority for Supply Commodities. The final line, which is now presented as the comprehensive figures, adds on the operations of the SIFs. Given the young profile of the Egyptian population, these funds currently show a significant profile because contributors far outnumber beneficiaries, who are principally pensioners.

In terms of the deficit, the net result is that the final figure in the third line is the lowest of the three. For 2000/01, for example, the preliminary actual figures show a deficit of 5.4 per cent of gross domestic product (GDP) in the first line, 6.8 per cent in the second line, and 2.1 per cent in the third line. The figures for the first quarter of 2001/02 are 2.8 per cent, 3.5 per cent and 2.3 per cent respectively.