CAIRO: Egypt’s economy will grow 2.1 percent this fiscal year, the lower end of the government’s targeted range, according to economists polled, who raised their forecasts from a quarter ago.
Street violence and political turmoil since an uprising toppled Hosni Mubarak in 2011 have hammered the economy of 85 million people and hurt its chances of recovery as foreign investors and tourists have fled.
The consensus of 10 economists polled over the past two weeks was for growth of 2.1 percent in the fiscal year to the end of June 2014. That is slightly higher than the 2 percent forecast given by a poll conducted in January.
The Egyptian government is targeting growth of 2-2.5 percent this fiscal year.
The survey suggested growth would accelerate to 3.2 percent in the year to June 2015, within range of the government’s forecast of 3 to 3.4 percent, but slightly below the 3.3 percent predicted in a poll in January.
Egypt’s economy grew 2.1 percent in the year to end-June 2013.
Supported by more than $12bn in aid from Gulf countries, Saudi Arabia, the United Arab Emirates and Kuwait, Egypt has launched two stimulus packages of around 30bn Egyptian pounds ($4.3bn) apiece.
The government is under pressure to cut energy and food subsidies which eat up a quarter of the state’s budget and contributed to a swelling deficit that reached around 14 percent of GDP last fiscal year.
The country’s foreign reserves have also come under pressure as the country has been running down its hard currency reserves to prop up the Egyptian pound. Reserves stood at $17.4bn in March against around $36bn before the 2011 uprising.
Reuters
