Egypt sees GDP growth at 5.5 pct in 2010/11

Sherine El Madany
3 Min Read

CAIRO: Egypt s economy, buoyed by climbing exports, should grow by 5.5 percent in fiscal 2010/11 and attract $10 billion in foreign direct investment (FDI) as it recovers from the global economic crisis, a minister said.

The growth forecast matches the consensus of 15 independent economists polled by Reuters last month and is stronger than projections for any of the Gulf Arab states apart from Qatar and for neighbors Turkey and Israel.

Factors contributing to this 5.5 percent growth are Suez Canal growth rates and the exports growth level going back to normal, Economic Development Minister Osman Mohamed Osman told a news conference on Thursday.

Osman said the tourism industry, a major foreign currency earner for Egypt accounting for around 11 percent of its gross domestic product, had bounced back from troughs in late 2008 and early 2009.

Tourism figures indicate that numbers of tourists, touristic nights and revenues have returned to levels from before the financial crisis, he said.

Egypt, while protected from the worst of the crisis, was hurt by a decline in tourism earnings, Suez Canal revenue and foreign investment. Growth fell to 4.7 percent last year after having sped along for three years at around 7 percent.

Osman said investments in Egyptian industry totaled LE 13 billion ($2.4 billion) in the six months to the end of 2009, with 80 percent of that coming from the private sector.

Non-oil exports added $4.67 billion to Egypt s earnings in the last three months of 2009, up from $3.72 billion in the same period of 2008, he said. The petroleum and mineral sector grew 5.6 percent in the quarter, he said without providing figures.

Egypt was targeting FDI of $10 billion this fiscal year and the same amount in the next fiscal year, Osman said, indicating growing confidence in the ability to attract cash from abroad.

Earlier this month, Investment Minister Rachid Mohamed Rachid said the $10 billion target for 2009/10 would be a tough one and that demand remained low in export markets such as Europe and the United States.

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