CAIRO: The economy isn t developing at the announced rates, Central Bank reports indicate different numbers, economist Ahmed Sayed El Naggar told Daily News Egypt commenting to what Minister of Economic Development Othman Mohamed Othman said earlier this week. At a press conference discussing the economic monitoring report of the third quarter of 2008/2009, Othman said that the situation of 10 percent of Egypt s poor was worse than it was in 2005. However, he said that 12 percent of the poor had overcome poverty and 68.1 percent maintained their status above the poverty line. The minister claimed that third quarter results this year witnessed remarkable increases in inflation rates, which reached 10.1 percent on average compared to 9.5 percent and 7.7 percent in 2007 and 2006. Prices have increased by 21 percent, therefore living conditions are worse than before so the figures of poverty aren t accurate, said Al Naggar, who is also a researcher at Al Ahram Center for Political and Strategic Studies. The minister pledged that development rates will not decrease to less than 7 percent, following the 7.5 percent achieved this year. Moreover, the industries sector development rates grew by 8.5 percent, while the construction sector developed by 15 percent, 7.4 percent of which in cement production and 6.4 in the steel industry. These numbers don't reflect the real development rates because they are loaded with inflation which is wrongly calculated, explained El Naggar. Development rates are much lower than this. He also disputed the results of income and expenditure research conducted last February by the Central Agency for Public Mobilization and Statistics (CAPMAS) which indicated that over the past year, poverty rates went down to 3 percent and the average expenditure per person increased to LE 8,511 which is 3.5 percent more than last year. The increase in expenditure implies an increase in income, which isn t the case here, explained El Naggar. Othman said that Egypt was doing well despite the global economic crisis thanks to a stable growth rate. The GPA reached $653 billion compared to $539 billion last year, the minister said, even though the trade deficit had increased to reach $15.8 billion compared to $10.4 billion last year. He attributed that to the increase in petroleum imports from $2.9 billion from July-March 2006/2007, to $6.8 billion in the same period in 2007/2008. Concerning employment, Othman said that manpower increased in the third quarter of this year to reach 24.2 million individuals compared to 23.3 million last year. He added that 225,000 job opportunities were created, 49,000 of them outside the country and 167,000 inside. Although Othman said that the PA had decided to increase government investments in 2008/2009 by LE 1.7 billion, mostly dedicated to essential services for poor areas, El Naggar is skeptical. Considering how the economy is run, things don't look comforting, he said.
