CAIRO: Egyptian Minister of Finance Youssef Boutros Ghali said his ministry expects an increase in the rate of growth in the local economy to reach 6 percent by end of June 2011, compared to 5.2 percent in the fiscal year 2009/2010. He also said he expects to see a decline in the public budget deficit to 7.9 percent, down from 8.4 percent in the same period the year before. Ghali said during comments at the opening session of the Euromoney Conference, which began on Tuesday, under the title “Economy after the Global Financial Crisis.” The Egyptian government has succeeded in broadening the base of the middle class 25 percent and “hopes to achieve growth ranges between 8 percent and 9 percent during the next two years,” the minister said, pointing out that government programs are continuing in the development of this class in “a more integrated system so that the government relies on middle-class spending to increase employment opportunities and a layer of skilled work.” Ghali added that government controls on the budget are “well” within the forecast of a decline in the deficit, adding that he expected a surplus in the balance of current transactions in the current financial year, without mentioning specific proportions. He also said that Egypt has a “complete strategy” from “several directions” in order to reduce public debt ratios to GDP from 120 percent to about 78 percent before the global crisis, and which then rose again to 82 percent during the crisis, saying that this decline is “mainly due to the growth of the economy faster rates of growth of public debt.” Ghali promised to cut poverty rates in Egypt by 50%, stressing that the government is preparing policies to reach this goal, adding that the government “will focus on a number of issues during the coming period, primarily education and income redistribution.” Ghali said many economists worldwide expect Egypt could witness the same high growth rates achieved by China in the 1980s, adding that “Egypt is similar to China at the beginning of its inception in 1981, where it has elements of strength in a good investment climate and a wide popular base with a high proportion in education, in addition to good economic indicators enjoyed by the Egyptian economy, which is a source of power.” Mahmoud Mohi Eddin, the former Minister of Investment, at a subsequent meeting, said that the poverty rate in Egypt has reached 20 percent. Mohi Eddin stressed that there is a “continuation in the case of economic mobility experienced by the investment climate in Egypt,” pointing out that state institutions concerned in economics “work hard to complete the reform plans to continue the high growth rates.” Despite the optimism, Tarek Rabia, a senior investment analyst with a top investment bank in Cairo, told Bikya Masr that he believes the government is “putting too much weight on percentage growth and not enough detail on the middle-class.” He added that if the government was interested in bolstering the middle-class “policies would be very different, but if they are interested in creating a model after China that allows them to compete on a global stage, they are succeeding.” BM
