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Construction, Telecom lead economy growth in Q3, minister
Released on - Thursday,05 November , 2009 -09:37 00
Cairo- Egypt’s economy expanded 4.9 percent in the third quarter, Economic Development Minister Osman Mohamed Osman said, with construction and telecommunications leading the increase.
Growth accelerated from 4.7 percent in the previous three months, Osman said by phone from Cairo today.
The economy of the most populous Arab country has weathered the global financial crisis “relatively well,” the International Monetary Fund said in July. The economy grew 4.7 percent in the fiscal year through June, while the government has said it expects growth of more than 5 percent this fiscal year.
“We expect growth to continue to rise in the coming quarters as external receipts improve and the government injects more funds into the economy,” Reham El-Desoki, senior economist at Cairo-based investment bank Beltone Financial, said in an e- mail statement.
President Hosni Mubarak said on Oct. 31 the government plans to spend more than 10 billion Egyptian pounds ($1.8 billion) on infrastructure to support growth.
The Egyptian pound rose 0.5 percent against the U.S. dollar after the announcement to 5.47 pounds.
Construction expanded 13.8 percent, government spokesman Magdy Rady told reporters after a cabinet meeting today. The telecommunications industry grew 13.5 percent, transport expanded 7 percent and the wholesale and retail sector expanded 6.3 percent.
Not Enough
Tourism rose 5.4 percent, while revenue from the Suez Canal, which brought Egypt $4.7 billion in the last fiscal year, contracted 19 percent.
Mubarak said the government stands ready to pump more money into the economy if necessary. Osman said last month the government is targeting a growth rate of between 8 percent to 10 percent starting in 2011.
“We have to try to push the economy further,” Osman said today. “This is way less than what we require. We had started to go above 7 percent and aspire for more.”
Gross domestic product expanded 7.2 percent in the fiscal year through June 2008.
The central bank has reduced rates six times this year, bringing the overnight deposit rate to 8.25 percent. The bank meets tomorrow to review borrowing costs.
Five economists surveyed by Bloomberg News expect the bank to leave rates unchanged for the first time this year, while one predicted a quarter-point cut.
Source: Bloomberg