Egypt targets 5% economic growth by mid-2018

CAIRO: Egypt targets a five per cent economic growth rate in the year to June 2018, the finance ministry said Sunday as the government seeks to revive an economy battered by political turmoil.

Egyptian authorities have battled high unemployment, inflation and a collapse in tourism income since the 2011 uprising that toppled former president Hosni Mubarak.

President Abdul Fattah Al Sissi, who led the 2013 military overthrow of Mohammad Mursi, Egypt’s first elected civilian president, vowed to get the economy back on track after his election the following year.

In a statement on Sunday, the finance ministry said it aimed to “raise growth for 2017-2018 to five per cent” and to create “real, productive jobs that help lower unemployment to 11 per cent and raise citizens’ incomes.”

Consumers have been hit by surging price hikes since November when Cairo floated its currency and slashed fuel subsidies as part of an economic reform package linked to a $12 billion International Monetary Fund loan.

The Egyptian pound had been pegged at 8.83 to the dollar, but has since weakened to more than 19 pounds to the dollar.

Egypt’s inflation rate jumped to 19.4 per cent in November from 13.6 per cent the previous month, according to the central bank.

Despite its woes, the government has projected 5.2 per cent GDP (gross domestic product) growth in the year to June 2017.

Economic output grew 4.3 per cent in the year to June 2016, the ministry of planning said in November.

The finance ministry hopes to bring unemployment — which officially stood at 12.6 per cent from July to September — down to 11 per cent in the year to June 2018.

The ministry said it also wants to cut its budget deficit to 9.5 per cent of GDP in the year to June 2018, down from 12.2 per cent the previous year.

It said it hopes to cut public debt to 94 per cent of GDP in the year to June 2018, with a medium-term target of 80 per cent.

“The government will continue to implement a structural reforms package to support productive sectors especially industry and exports, while attracting investments,” the ministry said.

It said it would press ahead with implementing a value added tax and “policies to rationalise spending.”