Egypt's economy to grow steadily over next 2 years

Tue Dec 21, 2010 2:30pm GMT

By Sherine El Madany and Dina Zayed

CAIRO (Reuters) - Egypt's economy will grow steadily over the next two years thanks to growing private investment but the expansion will be slower than that forecast by government officials, a Reuters poll showed on Tuesday.

The survey of 12 economists predicted gross domestic product (GDP) in the Arab world's most populous nation would grow 5.4 percent in the fiscal year ending June 2011, based on the median figure. Egypt's economy is seen growing faster than all Gulf Arab states except Qatar.

Forecasts from 13 economists showed it would grow 5.5 percent the year after, boosted by more private investment and a recovery in Suez Canal and tourism revenue.

"We forecast very steady growth, mainly due to domestic demand and private consumption as well as growth in private investments," said Mohamed Rahmy, economist at Beltone Financial.

"There is also a gradual recovery in external sectors including the Suez Canal revenues, tourism and non-oil exports."

The poll forecasts are well below the annual rates of more than 7 percent that Egypt had posted before the global financial crisis hit and the 6 percent annual rate that economists say Egypt must sustain to create jobs.

Egypt's finance minister said last week he expected the economy to grow by 7 percent in the financial year from July 2011, and 6 percent this year.

Egypt lowered its GDP growth figure for the last fiscal year that ended June 30, 2010 to 5.1 percent from a previously stated 5.3 percent.   Continued...

<p>Egyptians look at Queen Mary 2, the world's largest ocean liner, as it crosses the Suez Canal in Ismailia, some 120 km (75 miles) north of Cairo, March 28, 2009. REUTERS/Stringer</p>
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