CAIRO: Egypt’s foreign trade grew by 11.6 percent in the second half of 2008, with the United States accounting for almost a fifth of that activity, data released Wednesday by Egypt’s Central Bank showed.
The bank’s monthly report said total imports and exports between July to December hit $41.8 billion, with the US accounting for 19.5 percent of that. It said overall exports in the six-month period climbed by 3.8 percent to $13.6 billion, driven by a 7.5 percent increase in non-oil exports.
But in a sign of challenges confronting the Arab world’s most populous nation, foreign currency reserves slipped to $32.2 billion at the end of last month from $33.1 billion in February.
That slide comes as key cash sources for the government, such as tourism and Suez Canal revenues, are dropping on the back of the mushrooming impact of the global financial crisis.
Those declines have cut economic growth to 4.1 percent in the second quarter of fiscal 2008-2009, compared to 5.8 percent in the first quarter and 7.1 percent in the prior fiscal year.
“Going forward, the dire prospects for global growth in 2009 are likely to exert further downward pressure on external demand with unfavorable expressions on the domestic growth outlook, the bank said in its April report.
Cairo-based Mideast investment bank EFG Hermes, in a report released earlier this month, estimated that Egypt’s gross domestic product growth will slow to 3.3 percent in fiscal 2008-2009 and slump to 1.4 percent in the following fiscal year. It predicted that tourism revenues would fall to $9.2 billion in the current fiscal year, compared to $10.8 billion the previous year. Suez Canal revenues would likewise witness a drop from $4.5 billion to $3.6 billion
In March, Egypt’s Cabinet agreed to a new annual budget with a $17 billion deficit, a 36 percent increase from last year, because of a decline in revenues caused by the global meltdown.
The budget deficit as a percentage of GDP was projected to rise to 8.4 percent in fiscal 2009-2010, up from 6.9 percent in the present fiscal year. -AP
