Egypt expects $1.83 billion stimulus will spur growth

By Patrick Werr

CAIRO (Reuters) - A new Egyptian economic stimulus package could eventually spur 8.5 percent annual growth, but in the meantime the government will see if yet more money is needed, the finance minister said on Wednesday.

The 10 billion Egyptian pounds stimulus, earmarked for infrastructure projects, was unveiled last month, the third the government has adopted since the global financial crisis broke out last year.

"I'm hoping for 8-1/2 (growth). In two or three years I'll be able to reach 8-1/2," Youssef Boutros-Ghali told Reuters in an interview.

Egypt's gross domestic product (GDP), which grew by 4.7 percent in the fiscal year to June 30, has been relatively resilient to the global crisis. In the Jul-Oct quarter it grew by 4.9 percent.

Boutros-Ghali said he was expecting growth "a little north" of 5 percent in the current fiscal year.

Still, the government will review the stimulus's effect on the economy in a few months to see if more is needed.

"Maybe in six to eight months. Hopefully by that time everyone will be out of the mess by then and I won't have to do an extra stimulus," he said. "But if I have to I will."

"I had this feeling the economy is softening. It needs to be confirmed. But instinct tells me there is some softening. The 10 billion was a reaction to this," Boutros-Ghali said.