Inflation down, expenditure up DESPITE last year's economic troubles, the Egyptian economy grew by an average of 4.7 per cent during the final quarter of the fiscal year 2008/09, beating forecasts by the International Monetary Fund. Egypt's inflation rate fell in August to 8.4 per cent from 9.7 per cent, the lowest since 2007. According to the Central Agency for Public Mobilisation and Statistics, urban inflation, the benchmark that the Central Bank of Egypt (CBE) monitors, slowed to a 20-month low of nine per cent from 9.9 per cent the previous month. Eased inflation may encourage the CBE to cut interest rates for the sixth time this year, to support economic growth. In July, the overnight deposit rate was reduced to 8.5 per cent. Meanwhile, the Ministry of Finance declared that the fiscal deficit reached LE14.8 billion in July (equivalent to 1.3 per cent of GDP) versus LE10.6 billion in July 2008. Slower economic growth negatively affected the main hard currency earners, namely tourism, the Suez Canal and foreign direct investment (FDI). Tourism receipts fell three per cent in fiscal year 2008/09 to $10.5 billion, indicating a 1.6 per cent drop between April and June compared with a 17 per cent fall in the previous three months. Suez Canal revenue fell to $4.7 billion from $5.2 billion in the previous fiscal year, while FDI fell by 39 per cent to $8.1 billion. The communication and information technology industry led the economic expansion with 14.6 per cent growth, while the construction sector grew by 11.4 per cent. According to the latest reports by the Ministry of Finance, revenues and grants declined 7.6 per cent year on year in July 2009 reaching LE10 billion versus LE10.7 billion in July 2008. This decline followed from 14.6 per cent lower tax receipts on goods and services and 8.8 per cent lower customs receipts. Public expenditure increased by 16 per cent in July 2009, reaching LE24.7 billion versus LE21.3 billion due to increasing expenditure on salaries and government investments. It is noteworthy that the government approved a LE15 billion package to stimulate the economy. However, general social subsidies declined by 74 per cent to LE1.3 billion versus LE5 billion in July 2008 due to lower food prices. IBF in Cairo THE CAIRO Chamber of Commerce is organising the 13th International Business Forum (IBF) which will be held from 13 to 16 October, bringing together 1,500 entrepreneurs from Islamic countries to develop partnerships, according to Chairman Ali Moussa. The forum will include bilateral match-making meetings to promote cooperation in manufacturing and trade projects. The forum, which will also be supported by the Independent Industrialists and Businessmen Association of Turkey (MUSIAD) and the Organisation of the Islamic Conference (OIC), will include countries such as Turkey, Algeria, Morocco, United Arab Emirates, Saudi Arabia, Egypt, Syria, Jordan, Palestine, Lebanon, Yemen, Sudan, Qatar, Iran, Pakistan, Malaysia and the Balkan countries. Moussa noted the Turkish role in exchanging information and experts with Egypt, and helping to provide training for chamber employees. He added that there are about 200 Turkish factories operating in Egypt. He also added that this is the first time the forum is held in Egypt; in the past it has been held in Istanbul. Companies producing various products such as packaging materials, foodstuffs and beverages, furniture, machinery, tools, automotive spare parts, textiles and garments, construction and building materials, will participate in the forum. "IBF will provide unique opportunities for the Egyptian business community to enhance their trade and investment interests in the region," Moussa told Al-Ahram Weekly. In addition, Moussa emphasised that the forum also aims to market Egyptian products among the Islamic countries, while benefiting from their experience.
