CAIRO: Egypt’s economy should grow at an annual rate of two percent in the second fiscal quarter, the state’s planning minister said yesterday, after expanding less than one percent in the first quarter because of violent protests.
The government targets 3.5 growth in the current fiscal year, which ends June 2014. But the country has been rocked by violence ever since this past July, when the army ousted president, Mohamed Mursi.
Economists polled by Reuters predicted growth of just 2.6 percent for this year. The economy grew 2.1pc in the previous fiscal year, which ended before the latest wave of violence.
“The results of the first quarter of fiscal year 2013-14 for the period from July to September were modest and will not exceed one percent,” the Minister, Ashraf Al Arabi, told state news agency Mena. He said two percent growth was expected in the second quarter, from October to December, Mena said. The army plans for Egypt to vote on a new constitution on January 14-15, then hold parliamentary and presidential elections next year.
Egypt’s economy saw several years of seven percent growth before the popular uprising that brought down Hosni Mubarak in February 2011. Since then, tourism and foreign investment have collapsed and domestic labor disputes have increased.
Egypt, the most populous Arab state, needs hard currency to import basic goods from food to oil. In less than three years, it has burned through around $20 billion dollars in foreign reserves, borrowed billions from its allies and racked up billions in debts to foreign oil companies.
Reuters
