The Egyptian economy grew at an annualised rate of 7.5 per cent in the January-March 2008 quarter, faster than the government had predicted.

The rate of growth in gross domestic product (GDP), given in a cabinet statement on Wednesday, compares with 8.1 per cent in the October-December quarter of 2007 and 7.4 per cent in the January-March quarter of 2007.

For the first nine months of the financial year which began last July 1, the annualised rate of growth works out at about 7.4 per cent, above the rate the government has been forecasting.

Prime Minister Ahmed Nazif and his ministers had said they expected the economy would expand at a fraction over 7 per cent during the current financial year.

The cabinet statement said the fastest growing sectors were tourism at between 23 and 27 per cent, Suez Canal revenue at 19 per cent, construction at 15 to 15.5 per cent and communications at 13 to 15 per cent.

GDP at current market prices was worth 226.5 billion Egyptian pounds ($42.3 billion) in the quarter, compared with 180.8 billion in the same 2007 quarter.

It said this was equivalent to average annual GDP of 12,226 Egyptian pounds per capita. But the high rate  of economic growth has contributed to high inflation, which hit a three-year high of 16.4 percent in the year to April, economists say.-Reuters