Egypt’s finance minister said on Monday he expected the economy to grow by 7 percent in the financial year from July 2011, and by 8 to 8.5 percent the year after, up from 5.1 percent in the year ended June 30, 2010.
Finance Minister Youssef Boutros-Ghali said the government’s budget deficit goal for this year was 7.9 percent of gross domestic product, but that a deficit of 7.5 percent was likely. He said he expected a deficit of 6.5 percent in 2011-12.
"In our case, we have a budget deficit that came (in) under target," he said. "We have an economy that still managed (amid) all this turmoil to generate a growth rate last year of 5.2 percent. This year we will be 6 (percent), God willing."
"Next year we will cruise at 7 (percent), after that 8 to 8.5," Boutros Ghali told a conference.
Egypt lowered its GDP growth figure for the last fiscal year in October, to 5.1 percent from a previously stated 5.3 percent. The economy had grown by about 7 percent a year prior to the global financial crisis, above the 6 percent annual rate economists say Egypt must sustain to create jobs for its growing population.
The financial crisis also pushed up the country’s budget deficit, hitting key revenue-earners such as Suez canal receipts and tourism. The government also sought to stimulate growth with extra spending on infrastructure and other public works.
"Our (deficit) target this year is 7.9 (percent), but … likely the outcome will be 7.5," Boutros Ghali said. "Next year, we plan for 6.5 (percent of GDP)."
He said this would bring the budget deficit to the same level as before the financial crisis started in 2008.
Egypt’s budget deficit in the fiscal year ended June 2010 was narrower than first thought, at 8.1 percent of GDP, the finance ministry said in October, boosted by the success of a new tax regime.
Egypt’s financial year runs from July 1 to June 30.
