The government is targeting an economic growth rate of 4.6% in its plan for the coming fiscal year (FY), compared to an expected 4% by the end of June in the current FY.
The government is counting on boosting the contribution of investments and exports to this growth.
Minister of Planning and Administrative Reform Hala Al-Saeed said that the plan for the next FY is to gradually grow the contribution of investment by 1.2% to reach 1.4% in 2018-2019, according to the expected increase in the size of domestic and foreign investments, which will accompany the improvement in the business environment as one of the pillars of the economic and social reform programme.
The government is seeking to use net exports to positively contribute to the growth by 0.4% in 2017-2018, after a negative contribution that has continued over the past few years, which will gradually increase to 1.2% in 2019-2020. Therefore, investments and exports will substitute the domestic consumption in driving the economic growth and will lay the foundation of a new economic philosophy adopted by the government that will be different from the path of growth achieved during past years.
The economic growth targets focus on sectors that achieve high growth rates, such as the construction sector, which has achieved 11% as a result of the continued implementation of major national projects, including road construction projects, expansion of metro lines, and construction of one million housing units.
The economic plan for the next year is for the electricity sector to grow at an average rate of 7.5% as a result of boosting public investments in the electricity sector during FY 2017-2018 to convert aerial cables into ground ones.
The government has revealed that it is targeting the growth of the tourism sector to achieve a growth rate of 10% compared to FY 2016-2017, according to predictions of growth in the numbers of tourists.
The plan also has a growth of 3.7% by the manufacturing sector, excluding oil refining, as a result of the expected improvement in the business environment in light of the economic reform programme and the positive impact of the flotation of the pound on the competitiveness of the Egyptian industry.
The sustainable development plan for FY 2017-2018 includes reducing the unemployment rate to 11.8%, compared to 12.3% that was expected in 2016-2017, through providing the necessary guarantees for the implementation of public and private projects included in the plan, especially the service, industry, real estate, and construction sectors.
The target for investments in the sustainable development plan for the next FY is estimated at EGP 646bn compared to EGP 530bn during the current FY. The plan targets to inject public investments worth EGP 288bn, which represents 45% of total investments, while private investments represent 55% of the total targeted investments in 2017-2018 with a value of EGP 358bn.