Cairo lowers growth forecasts

25 February 2016

Egypt’s economic growth for the first quarter of the current fiscal year slowed to 3 per cent

Egypt has lowered its economic growth forecast to 4.3 per cent for the current fiscal year, according to Finance Minister Handy Dimian.

In an interview with Bloomberg, Dimian said the revised forecast is due to the economic consequences of the Russian Metrojet crash in October last year on the country’s tourism sector.

Egypt’s economic growth for the first quarter of the current fiscal year slowed to 3 per cent, down from 5.6 per cent in the same period a year earlier, according to data from the central bank.

“Tourism is one of the major sectors, not just as a driver of growth and one of the biggest sources of current-account receipts but because it has a higher multiplier impact on other industries”, Dimian said.

Dimian added that Egypt’s primary focus will continue to be attracting foreign direct investments and looking at ways to reignite the tourism sector.

Import-dependent Egypt has been grappling with foreign currency shortages since a popular uprising in 2011 over threw former President Hosni Mubarak, which has continued to slow economic growth. The following political upheaval and security concern drove foreign investors and tourists away from the North African country, which has dried up its main sources of foreign currency, making it an unfavourable environment for international companies.

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