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Egypt's GDP grows 4.9% annualised in Q1 of 09/10
Released on - Thursday,05 November , 2009 -09:24 36
CAIRO- Egypt's gross domestic product grew at an annualised rate of 4.9 percent in the three months to end-September, cabinet spokesman Magdy Rady said on Wednesday, a slight rise on the year to June.
Growth in the most populous Arab country has slowed sharply in recent quarters as the global slowdown hit exports, investment and tourism revenues and Suez Canal receipts, but the government and analysts say there are signs of a turnaround.
The economy grew by 4.7 percent in fiscal 2008/09, which ended in June, after growth of 7.2 percent in fiscal 2007/08.
Rady told Reuters growth was being driven by domestic investment, government stimulus and higher consumer confidence.
"Sectors that are still negatively affected are Suez Canal revenues and tourism, while sectors that are growing include construction and telecoms. These are growing in double digits, over 13 percent," he said.
A cabinet statement said the government was adding spending of 10 billion Egyptian pounds to the budget.
Prime Minister Ahmed Nazif said last month his government aimed to get annual economic growth back above 7 percent within two years, and that 4 billion pounds of the extra 10 billion pound stimulus had been spent.
Egypt spent almost 15 billion pounds to boost the economy in the first half of 2009.
Rady said the additional spending would "impact the budget deficit by a small percentage, but we aim that growth resulting from it will quickly close that gap".
The government has said the deficit would be 9-10 percent of GDP in 2009/10, compared to 6.9 percent in the previous year.
Monette Doss, an analyst at Prime Securities, said the boost to economic growth indicated the start of a rebound.
"I think the (fiscal) year will end at 5.1 percent growth," she said.
The central bank has focused on encouraging growth so far this year, cutting rates six times, but seven out of nine analysts polled by Reuters saw its monetary policy committee holding key interest rates when it meets on Thursday.
Source: Reuters