(AFP Photo)
By Doaa Farid
Egypt’s economic growth rate slumped to 1.5% in the fourth quarter of the fiscal year 2012/2013 compared to 3.3% in the corresponding period a year earlier. The growth rate decreased to 2.2% in both the second and third quarters, down from 2.6% in the first quarter, according to a recent report from the Ministry of Planning.
The report showed that growth rate in 2012/2013 reached 2.1% compared to 2.2% in 2011/2012, 1.8% in 2010/2011 and 5.1% in 2009/2010.
Registering its highest rate in 2011/2012, growth rate hiked to 5.2% in Q3 compared to 0.3% in Q1 and 0.4% in Q2.
According to the report, there is an 11.4% increase in GDP at market price in Q4 2012/2013 from Q4 2011/2012.
The interim government has adopted an economic stimulus plan which aims to increase the growth rate to 3% over the current fiscal year. The plan which spans between six to nine months involves additional investment projects worth EGP 22.3bn.
The economic stimulus plan also involves reducing the budget deficit to 9% from 14%.
However, The government’s budget deficit in the 2012/2013 fiscal year hit new high of EGP 240bn, representing 13.8% of GDP, according to an official statement issued by the Ministry of Finance in September.
Construction, real estate activities, communication, business and finance and insurance sectors have achieved the highest growth rate in Q4, while the tourism sector and Suez Canal have slumped.
Tourism growth rate has registered the highest perk among all sectors in the fiscal year of 2012/2013 reaching 6.6%. Meanwhile, earnings from the Suez Canal were the sector of least growth, dropping by 3.8%.
Meanwhile, a recent report by CAPMAS showed that the number of tourist arrivals to Egypt in August decreased by 45.6%, totaling 564.517 tourists in August 2013.
Total investments in 2012/2013 valued at EGP 248.6bn with a 3.7% decrease in the growth rate from 2011/2012 when the investments valued at EGP 258.1bn. Investment rate decreased in the last three years.
Despite the slide in the investment rate, the savings gap is still wide, about 7% of GDP, which goes back to decreasing the gross domestic rates.
The private sector contributed to the investment rate by 64% in 2012/2012, while the governmental sector contributed by 15.8%. About 24.1% from the investments is directed toward the oil and gas sector.
It is also reported that local liquidity has grown to EGP 2tn at the end of June 2013, with an EGP 201bn increase from 2011/2012.
The report showed a $32bn deficit in trade balance in the same fiscal year with a $2.5bn decline from the last previous fiscal year. The decline was attributed to a drop in volume of commodity imports with an increase in volume of commodity exports.
According to the report, the surplus in overall balance reached EGP 200m.
The amount of public revenues in 2012/2013 increased by 14% which amounted to EGP 41bn, EGP 30bn from them was in Q4.
Public expenses increased by EGP 40bn in Q4 and by EGP 112bn in 2012/2013. Wages and compensations for workers formulate EGP 141bn from the public expenses.
The report also showed that the volume of deposits increased by EGP 164bn at the end of June 2013, with a 17.2% increase from June 2012.
It was mentioned that the net foreign reserves increased to $ 18.7bn in September 2013 from $ 14.9bn in June 2013; however, it decreased from $ 26.6bn in June 2011.
Following the ouster of president Mohamed Morsi on 3 July, a number of Gulf countries pledged a total of $12bn to bolster Egypt’s foreign currency reserves including $5bn from Saudi Arabia, $3bn from the UAE and $4bn from Kuwait, in form of cash grants, deposits and petroleum products.
