Between fiscal 1999 and fiscal 2007, the period under review in this Country Assistance Evaluation (CAE), Egypt's economic performance improved substantially, particularly after 2004, following improvements in economic management, structural reforms, and correction of the exchange rate. The GDP growth rate averaged about 5 percent per year over this period, rising to almost 7 percent in 2006 and 2007, translating into a per capita income growth of almost 3 percent per year, a strong performance. Future Bank strategy should reflect Egypt's middle-income status by including a flexible lending program and an emphasis on knowledge services, including reimbursable technical assistance. The Bank can further strengthen the recent successful partnership by: (i) identifying direct and indirect interventions that could help reduce income disparities through improving the targeting of social safety nets; (ii) focusing analytic work on macroeconomic analysis and income disparities, and improving its dissemination; (iii) pursuing further financial sector reforms and promoting reforms that indirectly combat corruption (public financial management, simplification of taxation and business procedures, and an information act); and (iv) emphasizing sectoral strategies and policy and institutional reforms in infrastructure and energy.