Egypt’s economy grows contrary to IMF’s view, says interim PM

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Egypt’s interim Prime Minister Hazem el-Beblawy said the country’s economy is improving, despite weak growth forecasts issued by the International Monetary Fund (IMF).

In comments posted on Egypt’s official State Information Service, Beblawy cited the recent boom on the Egyptian stock exchange, a return of tourists to the country, an improvement in the exchange rate of the Egyptian pound and an increase of foreign exchange reserves to $20 billion. He said Egypt no longer suffers from a foreign exchange crisis.

Beblawy also said remittances by Egyptian expatriates are increasing, adding that the Saudi, Kuwaiti and UAE support for Egypt is strong. He added that this support is not just a cash support but extends to cover quick yield enterprises.

His comments come in the wake of a report by the IMF on the future of the Egyptian economy, which indicated that economic growth rate for the coming year will not exceed 2.8 percent compared to 3.5 percent as forecast by the government.

The IMF figures suggested that Egypt’s weak economic performance will continue until 2018.

Beblawy noted that Egypt is overcoming its problems quickly expecting that conditions would become normal when the political stability and security discipline is achieved.

The interim Prime Minister said previous IMF estimates have not been accurate.

Meantime, Minister of Planning Dr. Ashraf El-Arabi said the economic situation in Egypt is excellent, adding the IMF report indicating a weak outlook is correct, because the IMF based its estimates on the situation before June 30.

Arabi said the economic growth rate in the 2012-2013 financial year registered 2.1 percent, adding though this rate is higher than 1.8 percent in the year 2010-2011, yet it did not hit the target of 3.8 percent.

The minister said the volume of targeted investments this fiscal year amounts to EGP290 billion - 120bn Egyptian pounds for public investments and 170bn pounds for private investments distributed to different sectors.

Minister Arabi said if the targeted investments are carried out, growth rate will hit 5.3 percent compared to the past three years in which the economic growth rate reached only 2 percent. He added that economic growth will not be achieved without achieving social justice.

This article was first published in the Saudi Gazette.

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