CAIRO: Egypt is expected to see an economic growth rate ranging between 5.3 and 5.5 percent in the 2009/2010 fiscal year, Minister of Economic Development Othman Mohamed Othman said Tuesday. The country's economic growth came in at 4.7 percent in fiscal year 2008/09, Othman said in a press conference, above forecasts of a 4.5 percent growth rate. Egypt's fiscal year begins in July. The global economic crisis had a relatively minimal impact on the Egyptian economy with fewer implications than expected. "Eighty percent of the growth was [spurred] by domestic demand, Othman said. Egypt is considering another stimulus package of between LE 10 billion and LE 15 billion in the current fiscal years, following an injection of LE 15 billion in infrastructure spending during the last fiscal year to create jobs and cope with the effects of the economic crisis. "The discussion is open [between the prime minister and cabinet] and a decision should be made by October or November, he added. The Minister of Finance, however, did not welcome a second round of economic stimulus as it would increase the budget deficit by 1 percent. Egypt's current budget deficit is 6.9 percent. Economic growth came in at 5.8 in the first quarter of fiscal year 2008/09, 4.1 percent in the second quarter and 4.3 in the third quarter. Othman said the period where Egypt was most affected by the crisis was the second quarter of 2008/09, with major revenue earners such as tourism and Suez Canal receipts being hit hard. Suez Canal revenues were down 8.4 percent to $435 million, tourism revenues fell 3.1 percent to $339 million, oil exports dropped 24 percent to $3.467 billion and non-oil exports fell 4.8 percent to reach $719 million. Remittance declined by 11.7 percent and foreign direct investment (FDI), which had been steadily increasing over the past years and is largely seen as propping economic growth, dropped 38.7 percent. A report released by the ministry Tuesday attributed the steep decline in FDI to the losses incurred by international companies and investors due to tumbling world markets as well as the uncertainty accompanying the crisis. Financial investment also fell with income from investments abroad dropping 41 percent and stock market investment sliding 470.6 percent. "Foreign companies sold notes and government bonds and shares in the Egyptian stock market in the wake of volatilities in the [global] markets and fears of taking more risks, the report said. As economic growth slows, said Osman, so does the government's ability to create jobs. The rate of jobs creation fell 13 percent with only 600,000 new opportunities in fiscal year 2008/09, down from 690,000 the year before.
