Minister of Finance Amr El-Garhy (File photo: Al-Ahram)
Egypt's government is setting its growth rate target at 5.2 percent of GDP for the coming fiscal year, the Ministry of Finance announced on Sunday.
The government plans to increase public investment by 50 percent in the 2016/2017 fiscal year's budget to EGP 107 billion, according to an emailed statement.
A foreign currency crunch has slowed the country's economic growth by stifling production, while an overvalued pound has hindered exports and kept foreign investors at bay.
The shortage worsened following the downing of a Russian commercial jet after it departed from Egypt's Sharm El-Sheikh resort last October, killing all 224 passengers on board.
The Islamic State militant group claimed responsibility for the crash. Egypt-led investigations into the incident are still underway.
Tourism receipts, a major source of foreign currency income, were down 66 percent in the first quarter of 2016.
Growth slowed to 4.5 percent in the first half of the current fiscal year, compared to 5.5 percent a year earlier, Minister of Finance Amr El-Garhy told Egypt's parliament while presenting the new budget on Sunday. He predicted a growth rate of 4.4 percent for the entire 2015/2016 fiscal year.
In April, the World Bank predicted growth would slow to 3.3 percent in the current fiscal year, after reaching 4.2 percent in the 2014/2015 fiscal year, “before rebounding thereafter.”
The bank cited liquidity issues as affecting sectors such as extractives and an underperforming tourism sector internally, while “sluggish recovery” in the Euro zone would weigh on growth and lower oil prices might negatively impact workers’ remittances from the Gulf, another major source of national income.