Egypt's 4.1-pct economic growth exceeds gov't expectations

CGTN

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Egypt's

economic growth rate during the fiscal year 2016/17 exceeded the

government's expectations, reaching 4.1 percent while the total budget

deficit hit 10.9 percent of the Gross Domestic Product (GDP) compared to 12.5 percent in the previous fiscal year.

During a meeting with Egyptian President Abdel-Fattah al-Sisi,

Planning Minister Hala al-Said said that indicators showed that the

economic growth rate reached 4.9 percent during the last quarter of the

fiscal year 2016/17, which ended in late June, bringing the annual

economic growth rate to 4.1 percent.

The minister added that the GDP growth rate increased for the first

time since 2007, in addition to an increase in commodity exports by 10

percent and a decrease of imports by 14 percent.

Trade deficit dropped by 26 percent, and the unemployment rates

declined during the third quarter of the fiscal year from 12.7 to 12

percent, reflecting an increase in employment opportunities as a result

of national projects being implemented across the country, al-Said said.

Meanwhile, Sisi asserted, during another meeting with Prime Minister

Sherif Ismail and Finance Minister Amr al-Garhy, the necessity of

maintaining efforts to cut the budget deficit and debt rates in the new

budget for the fiscal year 2017/18, state-run MENA news agency reported.

Sisi also called for rationalizing spending, increasing growth rates

and raising social security allocations through supporting food

commodities and expanding direct cash support programs.

During the meeting, al-Garhy reviewed a report on the initial estimates of financial performance for the fiscal year 2016/17.

The report showed that Egypt's total budget deficit hit 10.9 percent

of the GDP compared to 12.5 percent in the previous fiscal year.

The primary budget deficit for the fiscal year 2016/17 reached 1.8

percent, worth 63 billion Egyptian pounds (3.55 billion U.S. dollars)

against 3.5 percent, 96 billion Egyptian pounds in the past fiscal year.

The annual revenue growth stood at 28 percent of the GDP, which

surpassed the annual expenditure growth that amounted to 22 percent of

the GDP, according to the report.

Furthermore, the finance minister asserted that the fiscal year

2016/17 witnessed an increase in the foreign investment rates and an

improvement in the trade balance in general, especially with regard to

non-petroleum products.

Moreover, the fiscal year saw a surge in production rates and the

demand for goods produced by private sector companies reached

unprecedented levels, the minister said.

Exports also reflected a remarkable improvement in the country's economy, according to the minister's report.

Egypt's government hopes for further foreign direct investments (FDI)

to boost the country's economy that has been suffering over the past

six years.

Massive political turmoil and relevant security issues have led to

declining tourism and foreign investment amid growing budget deficit,

inflation rate and foreign and domestic debts.

On Friday, the Egyptian ministry of investment said that FDI in Egypt

rose by 26 percent to reach 8.7 billion dollars in the 2016/17 fiscal

year, compared to 6.9 billion dollars in the previous year.

To attract foreign investors, Egypt has floated its local currency's

exchange rate and has taken a series of measures to ease investment

process.

Egypt's efforts to revive its economy have started to yield good

signs as Saudi Prince Alwaleed bin Talal, also a businessman, announced

on Monday that he will invest more than 800 million dollars in the North

African country that used to be an attractive investment hub a few

years ago.

The most populous Arab country has also started last year a

three-year economic reform program including austerity measures, fuel

subsidy cuts and tax increase.

The program is encouraged by a 12-billion-dollar loan from the International Monetary Fund.