Egypt: Economy expands 5.8% in first quarter

The Egyptian economy expanded 5.8% in the first quarter of 2010 propelled by growth of 11.3% in the ICT sector. This is its fastest pace of expansion in two years and is expected to top off at 5.3% in the fiscal year ending June. Economic Development Minister Osman Mohamed Osman said that Egypt’s fast paced growth was also spurred by manufacturing, tourism and revenue from the Suez Canal. Manufacturing grew by 6% in the quarter while construction expanded by 14.7%. Suez Canal revenues went up by 10.5% and revenue from the tourism industry surged by 24% in the quarter to $2.7 billion.

Urban inflation slowed down to its lowest since November 2006, to 11.4% in April from 12.2% in March, with the central bank holding the overnight deposit rate unchanged at 8.25% and overnight lending rate steady at 9.75%. A dip in the price of food and beverages is the main reason behind the easing of inflation. Core annual inflation, which excludes food prices, fell to 6.62% in the year to April compared to 7.04% in March.

Egypt’s balance of payments posted a surplus of $3.1 billion in the year to March. The current account deficit narrowed by 24% to around $2.6 billion compared to $ 3.4 billion during the same period last year. Trade deficit, on the other hand, contracted to $18.5 billion in the nine months to March.

According to a report by the government statistics agency, unemployment in Egypt stood at 9.4%, representing 2.3 million jobless citizens in the fourth quarter of 2009. With inflation continuing to hover in double digits, Egypt was recently racked by protests, as people demanded an increase in minimum wages. The rising cost of living, due to price hikes and shortages in basic necessities, has kept 40% of the population below the poverty line. Protestors, who gathered outside government offices, asked that the minimum wage be raised significantly from the present meager $6.3 per month to $216.

Πηγή : thomaswhite.com

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