Egypt’s Economy Grows 4.3% on Construction, Telecoms

Cairo, Egypt | May 21, 2009 by D-8 Secretariat

Egypt's economy growth has picked up from 4.1 percent in the previous three months

Egypt’s economic growth accelerated to 4.3 percent in the first quarter of 2009 as construction, telecommunications and transportation expanded, defying the global financial crisis.

Growth picked up from 4.1 percent in the previous three months, the government said earlier last week.

“There is a breakthrough,” Investment Minister Mahmoud Mohieldin said in an interview after a cabinet meeting held to discuss the latest economic indicators in Cairo, as quoted by Bloomberg.

The economy of the most populous Arab country has proved more resilient to the global recession than many economists had expected. The government now forecasts growth of between 4 percent and 4.5 percent in the fiscal year through June, compared with the 4 percent forecast last month, Cabinet spokesman Magdy Rady told reporters.

“We are pleasantly surprised by this quarterly growth rate as we had expected more subdued growth,” Reham El-Desoki, senior economist at investment bank Beltone Financial, said in an e-mailed note to clients.

Trade & Industry Minister Rachid Mohamed Rachid had earlier said growth in the quarter was 4.7 percent.

The government has approved a stimulus package of 15 billion Egyptian pounds ($2.7 billion) for the current fiscal year and has said it may spend a similar amount the following year.

Industry Growth

Construction expanded 16 percent in the first quarter from the year earlier, while the telecommunications industry grew 14 percent, the cabinet statement said.

Revenue from the Suez Canal and tourism, sources of currency that helped fuel an economic expansion of more than 7 percent in the past three years, declined in the quarter due to the credit crisis, the statement showed.

Revenue from the canal fell 22 percent, compared with a decline of 2.5 percent in the previous quarter. Tourism revenue slid 6 percent over the same period.

“We see a kind of change of leadership in term of Egypt’s GDP growth,” Turker Hamzaoglu, an economist at Bank of America Corp.-Merrill Lynch & Co, said in a telephone interview from London.

“We see that there is some support from consumer spending,” he said. He is forecasting growth of 3.5 percent in the fiscal year through June, from 7.2 percent in the previous year.

Source: Bloomberg

Read Also

• Egypt economy grows at fastest rate in five years
• Egypt’s Construction Investments to Reach USD 7.3 billion by 2015
• Egypt Economic Growth 7.2 percent
• Indonesian Economy Growth Soars the Highest in 11 Years
• Indonesia’s Economy Expands at Fastest Pace in a Year
• Bangladesh Economy on Track to achieve 6% Growth
• Egypt: 2010 and 2011 Will Bring Economic Growth
• Egypt’s Economic Reforms Empower Private Sector
• Egypt Tourism is On the Up Again
• Malaysia, Indonesia Growth Accelerate on Manufacturing & Investments