SCZONE showcases investment opportunities to eight Japanese companies    Egypt urges Israel to accept Gaza deal amid intensifying fighting    Egypt, ADIB explore strategic partnership in digital healthcare, investment    SCZONE, Tokyo Metropolitan Government sign MoU on green hydrogen cooperation    Al-Sisi, Macron reaffirm strategic partnership, coordinate on Gaza crisis    Egypt welcomes international efforts for peace in Ukraine    Contact Reports Strong 1H-2025 on Financing, Insurance Gains    Egypt, India's BDR Group in talks to establish biologics, cancer drug facility    AUC graduates first cohort of film industry business certificate    Egypt to tighten waste rules, cut rice straw fees to curb pollution    Indian tourist arrivals to Egypt jump 18.8% in H1-2025: ministry data    Egyptian pound down vs. US dollar at Monday's close – CBE    Egypt's FM, Palestinian PM visit Rafah crossing to review Gaza aid    Egypt prepares unified stance ahead of COP30 in Brazil    Egypt recovers collection of ancient artefacts from Netherlands    Egypt harvests 315,000 cubic metres of rainwater in Sinai as part of flash flood protection measures    Egypt, Namibia explore closer pharmaceutical cooperation    Fitch Ratings: ASEAN Islamic finance set to surpass $1t by 2026-end    Renowned Egyptian novelist Sonallah Ibrahim dies at 88    Egyptian, Ugandan Presidents open business forum to boost trade    Al-Sisi says any party thinking Egypt will neglect water rights is 'completely mistaken'    Egypt's Sisi warns against unilateral Nile measures, reaffirms Egypt's water security stance    Egypt's Sisi, Uganda's Museveni discuss boosting ties    Egypt, Huawei explore healthcare digital transformation cooperation    Egypt's Sisi, Sudan's Idris discuss strategic ties, stability    Egypt to inaugurate Grand Egyptian Museum on 1 November    Greco-Roman rock-cut tombs unearthed in Egypt's Aswan    Egypt reveals heritage e-training portal    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Economy grows as inflation soars
Published in Daily News Egypt on 16 - 05 - 2008

CAIRO: The Egyptian economy grew at an annualized rate of 7.5 percent in the first quarter of 2008, compared to 7.4 percent in the same period last year and 8.1 percent in the last quarter of 2007, the Cabinet said in a press statement.
The Cabinet said the current rate of growth in gross domestic product (GDP) was above government's expectations. They previously expected the economy to grow at 7.1 percent during the current financial year.
According to Beltone Financial, Egypt's economy is set for dynamics of healthy growth, which would continue to grow at healthy levels in the medium term.
Angus Blair, head of research at Beltone Financial, said that Egypt would shrug off the current slowdown in global economy. "Egypt continues to be a major beneficiary because of the government, which has done an amazing job.. The main thing to do is to make sure that economic growth continues to be as strong as possible. When you have that strong economic growth, you have investment, and then people spend. By spending you create the market-buyer effect, which people see it all through the society.
"They [the government] have already created it and will continue to create the right conditions for economic growth to help people all the way.
The Cabinet stated that the fastest growing sectors were tourism at 23-27 percent, Suez Canal revenue at 19 percent, construction at 15-15.5 percent and communications at 13-15 percent.
Recent data shows that Suez Canal revenues grew to $1.2 billion in the first quarter of this year, up from $1 billion in the first quarter of 2007, due to rising numbers of vessels passing through.
Growth in construction sector has mainly been fueled by Egypt's promising real estate market. Total investments in Egypt's real estate market have soared to $52 billion in some 16 mega projects. According to Prime Minister Ahmed Nazif, the value of built up real estate as of last February stood at LE 200 billion ($37.5 billion).
According to the Cabinet, Egypt's nominal growth rate (GDP at current market prices) escalated to LE 226.5 billion in the quarter, compared with LE 180.8 billion in the same 2007 quarter. The figure comes way above government's forecasts of a nominal GDP worth LE 150 billion.
The current rate achieves an average annual GDP of 12,226 per capita.
On the other hand, Egypt's high economic growth rate has triggered high inflation, which hit a three-year high of 16.4 percent in the year to April. Analysts expect inflation to shoot to 20 percent within a few months when the government's latest hikes in prices of gasoline, cigarettes, and energy for intensive industries reflect on the consumer price index.
"The downside is that Egypt is importing inflation on top of this economic growth due to inefficient agricultural reform, Blair said. "There has to be agricultural reform within Egypt to be able to have greater food production and [thus reduce food imports]. That should be a major priority.
Lack of mass public transport in Cairo is another concern that could slow economic growth. "Cairo is a mega city and lack of mass public transport will act as a bottleneck to its growth quite quickly. You have to look to trams and light railways because they are very quick to install. They have to be introduced very quickly across the whole of greater Cairo, from Heliopolis all the way to Sixth of October, he added.
"There's a lot of attention to development of ports, airports, major roads, and railways between cities. But for Cairo, we ignore it in many ways and that would act as a major constraint to growth.because it slows people around.


Clic here to read the story from its source.