Finance minister reassures investors on Egyptian economy
With growth surging ahead and inflation high, some analysts have voiced their concerns that the Egyptian economy is getting ahead of itself.
Youssef Boutros-Ghali: deficit is big, but healthy
The economy is expected to grow 6.2% this fiscal year, according to a recent government report, while the annualized inflation rate is just over 12%. The inflation rate has more than trebled since the end of 2005. But finance minister Youssef Boutros-Ghali says that the figures do not mean that the economy is overheating and adds that he expects the inflation rate to fall to between 8% and 9% next year.
Speaking last month at Euromoney’s Egypt investors conference, the minister admitted that the high inflation rate was "partly self-inflicted". He claimed that one-off shocks, such as a 40% adjustment in energy prices last year, contributed to the present level. However, Boutros-Ghali reckoned that the situation was under control. Last year the central bank embarked on a tightening of monetary policy, and in February the ministry of trade and industry announced a significant cut in customs duties. The average import tariff was cut by 25% to 6.5%.
The minister also dispelled concerns about the level of the country’s fiscal deficit, which last year hit 8.6%