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INVESTMENT TO TOP $1.4bn

Egypt approves $3.2bn stimulus plan

Cairo, August 28, 2013

Egypt's cabinet approved on Wednesday an additional 22.3 billion Egyptian pounds ($3.19 billion) in investment projects to boost the economy over the coming 10 months, Deputy Prime Minister Ziad Bahaa el-Din said.
 
Despite the new spending, the government aims to reduce the budget deficit to 9 percent of gross domestic product in the fiscal year to end-June 2014 from 14 percent last year, Finance Minister Ahmed Galal said.
 
This it would do by streamlining spending, especially on energy subsidies, Galal said. The two ministers were speaking to reporters after a cabinet meeting.

The cabinet expects to remain in power only until elections early next year.

It plans a series of initiatives to stimulate the economy, the minister said, including paying arrears the government owes to contractors, extending natural gas to more residences and giving support for tourism.

It will also work with the banks on the fate of 4,000 factories that have become insolvent and shut down.

Part of the new investment would be directed in particlular towards Egypt's impoverished south.

The army-backed interim government, keen to improve conditions for a deeply polarised population battered by more than two years of political and economic turmoil, is under intense pressure to avoid unpopular austerity measures.

Egypt's deficit has jumped since the beginning of 2013 to nearly half of all government spending.

After Islamist President Mohamed Mursi was deposed by the army last month, Saudi Arabia, Kuwait and the United Arab Emirates promised Egypt a total of $12 billion in loans, grants and fuel shipments. Of that, $5 billion has already arrived. – Reuters




Tags: Egypt | investment | aid | Stimulus | factories |

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