DAVOS: Egypt s economy should expand by 7.5 percent this year, with growth taking priority over curbing inflation, Prime Minister Ahmed Nazif said on Thursday.
Our first priority is to grow and grow as fast as we can. We have achieved levels of growth of about 7 percent and, continuing on that path, we are projecting 7.5 percent this year, he told a news conference at the World Economic Forum.
There would be some inflation as a result but Nazif said he was not concerned and he played down the possibility of an interest rate increase to curb price rises.
We will see some inflation in the process as we go ahead. It doesn t worry us for one main reason that most of the inflation, as we ve seen last year, was cost-driven, so we don t see much effect coming from reducing liquidity through interest rates or other things.
Prices rose 12.4 percent in the year to the end of December, the highest rate for two years. Since inflation started rising in mid-2006, ministers have been saying it is a temporary phenomenon and will soon fade.
Nazif earlier said there could be progress on privatizing state banks by the middle of this year. The private sector could have a role in Banque du Caire after it merges with Banque Misr, he added.
Asked when more state banks might come to the market, the premier told Bloomberg TV: I think you ll see more of the same this year. Hopefully by summer, yes.
We see also changes in other state banks as we go ahead, especially Banque du Caire which has, for now, been absorbed by one of the large banks but we hopefully see a future also for private sector injection in there, he said.
The government is merging Banque du Caire and Banque Misr, the third and second largest state banks.
The government sold 80 percent of Bank of Alexandria, previously the fourth largest, to Italy s Sanpaolo in October for an unexpectedly high price of $1.6 billion.
It has not previously said it planned to privatize the other big state banks.
