Egypt expects slower growth, larger deficit by June 2014: Finance minister

Deya Abaza, Wednesday 12 Mar 2014

GDP forecast to grow at 2-2.5 percent while budget deficit to reach 11-12 percent

Finance Minister Hany Kadry Damian
Finance Minister Hany Kadry Dimian (Photo: Al-Ahram)

Egypt's new interim government is setting its economic bar lower than its predecessor, according to figures made public by newly appointed finance minister Hany Kadry Dimian on Wednesday.

The economy is now set to grow at a rate of 2 to 2.5 percent during this fiscal year, as opposed to the official target of 3.5 percent announced by the previous cabinet under former prime minister Hazem El-Beblawi, an estimation which many analysts considered too optimistic.

Political turmoil and a night-time curfew following the ouster of Islamist president Mohamed Morsi in July meant that growth was sluggish in the first quarter of the current fiscal year, slowing by 0.5 percent from the previous quarter to record 1 percent. 

Meanwhile, the budget deficit is expected to reach between 11 and 12 percent by the end of the current fiscal year, the finance minister told reporters at his first press conference since he took up his post following a ministerial reshuffle earlier this month.

The projected budget deficit is a revision on a previous target of 10 percent announced by El-Beblawi's government, which had recently started implementing a minimum wage scheme at the cost of LE18 billion annually. 

The current government is aiming to reduce the deficit to between 10 and 10.5 percent in the 2014-2015 fiscal year.


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