Egypt’s economy is recovering, country’s central bank governor says

Country expects GDP growth of 3.5 per cent in 2013-2014 as it grapples with political turmoil

Abu Dhabi: Egypt’s economy is on its way to recovery and is expected to fare much better next year, its Central Bank Governor Hesham Ramez said on the sidelines of a meeting of Arab central bankers in the capital.

“The economy is trying to be back on track. We are moving in the right direction. 2014 will be much better as our resources are increasing and the confidence locally, is coming back,” Ramez told reporters, adding Egypt had enough foreign reserves to cover four months of imports.

Egypt has been in the midst of a civil war and deep political turmoil which has resulted in the ouster of two presidents since 2011.

Egypt’s Planning Minister Ashraf Al Arabi said last month the increased spending in government projects will boost growth to 3.5 per cent in the 2013-2014 fiscal year from 2 per cent last year.

Ramez said the Gulf Cooperation Council (GCC) countries had pledged $12 billion (Dh47.7 billion) in aid to Egypt, of which they have received $7 billion so far.

“We received $3 billion from the UAE and $2 billion each, from Saudi Arabia and Kuwait,” said Ramez.

He said Egypt was expecting more financial aid from Gulf countries.

Growing tensions

Egypt returned $2 billion of financial support from Qatar earlier this month after talks to convert the funds into three-year bonds broke down, a move interpreted as a sign of growing tensions between the two countries in the wake of the removal of Mohammad Mursi from the presidency in July.

Earlier, in his opening remarks to the Arab central bankers, UAE Central Bank Governor Sultan Bin Nasser Al Suwaidi said the country’s bank reserves as of July end stood at Dh92.7 billion, which is 84 per cent of the banks’ bad and doubtful loans.

“Bank reserves increased by 19.5 per cent last year and by 6.5 per cent during the first seven months this year,” Al Suwaidi added.

He said the UAE bank deposits increased 9.2 per cent on year in 2012 and 7.3 per cent on year during the first seven months of 2013.

“Ninety per cent of the deposits in UAE banks were held by the UAE residents at the end of July,” said Al Suwaidi, adding the deposits exceeded loans by more than Dh92 billion. The governor also said the bank loans increased by 2.6 per cent on year in 2012 and by 5.6 per cent on year during the first seven months this year.

Economic report

The agenda of the Arab central bankers meeting included discussions of a report by the General Manager of the Arab Monetary Fund. Participants also discussed the first draft of the 2013 Arab economic report, which discusses the economic developments and challenges faced by Arab countries. The discussions touched upon the topic of consumer protection and its importance. The governor of the Central Bank of Kuwait discussed the bank’s efforts in raising consumer protection. The governor of the Saudi Arabian Arab Monetary Fund discussed G20, the issues it faces, and their effect on the developing countries.

— Sarah Diaa, a trainee at Gulf News, contributed to this report

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