October 25, 2016 / 9:12 PM / 3 years ago

UPDATE 1-Egypt's Sisi says military economy just 1-1.5 pct of GDP

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CAIRO, Oct 25 (Reuters) - The Egyptian military’s economic activities are equivalent to just 1 to 1.5 percent of GDP and not more than 20 percent as some have claimed, President Abdel Fattah al-Sisi said on Tuesday in a televised speech.

Sisi, a former military general who took office in 2014, has promised to revive the economy, which has struggled since a 2011 uprising scared away investors and tourists, Egypt’s main sources of foreign currency.

He has called in the army to assist in major infrastructure projects and with distribution of subsidised commodities to keep a lid on rising prices amid an acute shortage of dollars that has hiked the cost of goods.

“In case you’re wondering how large the economy of the armed forces is in terms of GDP, I’m going tell you so it’s clear: 1 to 1.5 percent,” Sisi said at a national youth conference held in Sharm el-Sheikh.

The size of the military, which produces everything from bottled water to macaroni, has long been a topic of speculation in Egypt but official comment on the scope of its economic activities is rare.

Sisi’s comments come just one day after Prime Minister Sherif Ismail said in a prime time TV interview the military’s economic role was likely to decrease within two to three years .

The military’s activities have appeared to expand over the last year. Armed forces vans roam the country selling cheap groceries and military retail outlets have popped up, while military agencies have attempted to procure basic commodities from international traders amid shortages.

Sisi said the armed forces are not entering the economy to profit or compete with the private sector, and that their projects are subject to taxes and regulatory oversight.

He added that the military would deliver 1,350 projects by 2018 but did not specify their exact nature.

Reporting by Ali Abdelaty; Writing by Eric Knecht; Editing by Catherine Evans

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