The Egyptian economy expanded 4.7 percent in the fiscal year through June, beating forecasts by economists and the International Monetary Fund.

“The Egyptian economy is starting to overcome the finan...

The Egyptian economy expanded 4.7 percent in the fiscal year through June, beating forecasts by economists and the International Monetary Fund. “The Egyptian economy is starting to overcome the financial crisis,” government spokesman Magdy Rady told reporters today in Cairo. Economic Development Minister Osman Mohamed Osman and Finance Minister Youssef Boutros-Ghali had announced the data earlier to Bloomberg News. The growth rate indicates that the economy of the most populous Arab country expanded about 4.6 percent in the final quarter of the fiscal year compared with 4.3 percent in the previous three months, said Mohamed Abu Basha, an economist at Cairo-based investment bank EFG-Hermes. “This proves that the economy was more resilient than expected,” Abu Basha said in a telephone interview. The communication and information technology industry expanded 14.6 percent, while construction grew 11.4 percent, Rady said. EFG-Hermes, the country’s largest publicly traded investment bank, and Barclays Capital forecast growth of 4.1 percent for the fiscal year. Egyptian investment bank Beltone Financial forecast 4.5 percent, while the IMF predicted growth of between 4 percent and 4.5 percent. Weathering the Storm Egypt has weathered the global financial crisis ”relatively well,” containing the impact through measures that included additional fiscal spending, the IMF said on July 27. The government had approved a 15 billion Egyptian pound ($2.7 billion) package to stimulate the economy. Still, economic growth was below the 7.2 percent achieved during the previous fiscal year. Revenue from tourism, foreign direct investment and the Suez Canal, Egypt’s top three foreign currency earners, all declined. Tourism receipts fell 3 percent in the fiscal year to $10.5 billion, the central bank said last week. The revenue from tourism indicates a 1.6 percent drop between April and June, compared with a 17 percent fall in the previous three months, Abu Basha said. Suez Canal revenue fell to $4.7 billion from $5.2 billion in the previous fiscal year, the central bank said on Aug. 19. Foreign direct investment declined 39 percent to $8.1 billion. Economic growth is expected to ease to 3.9 percent in the current fiscal year as external demand “remains subdued,” Reham El-Desoki, senior economist at Beltone Financial, said in an e-mailed statement. (Source: Bloomberg)