MANAMA: Egyptian exports could fall 10 percent in the current 2008/09 fiscal year as the global slowdown slashes demand for the North African country’s goods, the trade and industry minister said on Monday.
Industrial production will contract until the new fiscal year starts in July before beginning to grow again, Rachid Mohamed Rachid added.
Egypt, the most-populous Arab country, is facing a slowdown in economic growth as its biggest sources of income – tourism, exports and the Suez Canal – show signs of faltering.
Exports from Egypt’s construction materials and petrochemicals industries, including fertilizers, were getting hit by a drop in prices and volumes, even as food and textiles exports continue to grow, Rachid said.
“All in all I would expect a drop of maybe 10 percent (for the fiscal year), Rachid told Reuters in an interview.
“In the petrochemical industry, including fertilizers, which have been booming, prices have dropped more than 50 percent, and we’re seeing that volumes will drop by another 20 percent.
Rachid said industrial output in Egypt would shrink until about July, when the country’s new fiscal year begins.
Industrial output could contract 3 to 4 percent in each of the first and second quarters of 2009, he said.
“I expect for Q1 and Q2 of the calendar year a drop to the extent that we’re starting to see some negative growth, and in Q3 and Q4 it will start to pick up again, Rachid said, speaking in Bahrain’s capital Manama where he was attending a conference.
“But it’s very difficult (to forecast), it depends on how things evolve, he said.
The Egyptian economy faced a “serious contraction in growth because the global financial crisis had hit all vital economic sectors, its finance minister said last month.
Economic growth in Egypt slowed to 4.1 percent in the October-December quarter from 7.7 percent a year earlier as revenues from the Suez Canal and manufacturing took hard hits.
The canal is an important source of foreign currency for Egypt, along with tourism, oil and gas exports and remittances from Egyptians living abroad.
However, Rachid declined to give a forecast for Egyptian economic growth for the current fiscal year.
“It’s very challenging to get to any numbers at the moment. Obviously like everybody else, we’re depending on how is going to be the performance (of the economies) in Europe and the US, he said.
The Egyptian pound could come under pressure as the economy slows, the prime minister said last month.
To help the economy cope, Egypt has approved a stimulus package worth LE 15 billion to be spent mainly on infrastructure projects to create new jobs.
