Egypt sees weaker-than-projected economic growth

Egypt's Central Bank. (AP/Nasser Nasser)

CAIRO: Egypt's annual economic growth rate will hit 3 percent by end-June, below the government's projected 4 percent because of political instability, the Planning and International Cooperation Minister said on Monday.

In remarks reported by the state news agency, Ashraf al-Araby also said the rate of annual growth was around 2.5 percent in the three months ending in December. Egypt's fiscal year runs from July to June.

Referring to the 4 percent growth rate targeted by the government, Araby said: "The current political events hampered that."

The Egyptian economy has been hit by more than two years of turmoil since the popular uprising that swept Hosni Mubarak from power in February 2011. The unrest has driven away tourists and investors.

President Mohamed Mursi's efforts to get the economy moving again have been hit since late November by unrest set off by what his opponents saw as an attempt at political domination - a claim rebuffed by his administration.

The instability has triggered a flight into U.S. dollars and an 8 percent fall in the value of the Egyptian pound. The country's reserves of hard currency have also dipped, falling to $13.6 billion in January - below the $15 billion level needed to cover three months worth of imports.

Egypt is seeking a $4.8 billion loan from the International Monetary Fund, though many economists expect conclusion of an agreement to be postponed until after parliamentary elections due to get underway in April or May.

Government officials have repeatedly said they expect an IMF delegation to arrive soon to complete talks on the loan, which was agreed in principle in November but postponed in December at Cairo's behest because of the political turmoil in the country.

Araby said the IMF delegation would arrive "in the next few weeks" to finish the talks.





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