Egypt growth seen at 5-5.5pc in 2009/10
Cairo, June 15, 2010
Egypt's economy is expected to grow by five to 5.5 per cent in fiscal year 2009/10, which ends on June 30, the investment minister said on Tuesday.
The government previously said the economy could expand by 5.3 per cent this year, after growing by 4.7 per cent in 2008/9.
"We expect average growth rates to reach 5 to 5.5 per cent," minister Mahmoud Mohieldin said. "In any case, it will not be lower than 5 per cent."
Economic Development Minister Osman Mohamed Osman said in May GDP could grow as much as 5.3 per cent this fiscal year, up from a previous estimate of 5 per cent, and 6 per cent in 2010/11, up from an estimate of 5.8 per cent.
Mohieldin echoed the 6 per cent growth forecast for the coming fiscal year.
The investment minister was speaking at a real estate and construction conference in Cairo, where he told delegates construction has grown by 70 per cent in the last five years and that real estate closely tailed construction as Egypt's most productive sector.
"The most important sectors boosting growth are real estate and construction. Those sectors grew at a pace that is no less than double what was expected," he said, referring to the current fiscal year.
"We expect growth to reach 6 per cent next year and with more investment in the real estate sector, particularly toward low-income margins -- to house the masses -- we expect growth will continue," Mohieldin added.
The booming sector, aided by a young population and plentiful and cheap materials, helped Egypt escape the worst of the global downturn. The economy had been humming along before the crisis, registering 7.2 per cent growth in 2007/08.
Egypt produces around 50 million tonnes of cement annually and aims to boost its capacity to 80 million tonnes a year by 2012. Domestic consumption of cement grew some 25 per cent in 2009, prompting the government to impose an export ban in a bid to fill the gap between demand and supply.
"There is a consistent and regular demand for housing in Egypt," Mohieldin said.
Last month, state newspapers reported government plans to raise taxes on cement and steel, in part to offset a growing budget deficit weighed down by planned health and agriculture spending. – Reuters