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Egypt’s GDP Growth Seen to Slow

Growth in economic activity for Egypt would stand in contrast to much of the rest of the world where the global recession is cutting into output at a rapid pace.

Mohieldin said growth was based upon still strong housing, infrastructure and agricultural sectors, plus dropping inflation rates.

A big help for the housing and infrastructure sectors has been declining costs for building materials due to the global economic slump which is lowering commodity prices.

“Now we are using more conservative (GDP) estimates and projections, so ranging between 3.5 and 4 per cent. But we are going to be introducing a package, currently, targeting 5 per cent growth,” Mohieldin said, without elaborating on the details.

“In these days you target whatever, but it is better to work on the conservative scenario,” he said.

Among the hardest hit sectors will be manufacturing due to its orientation toward exports, he said.

Infrastructure makes up 26 per cent of gross domestic product while nonpetroleum manufacturing accounts for 12 per cent of GDP, according to Ministry of Economic Development data. Real estate and construction is 5 per cent of GDP.

Earlier this week, Egyptian Finance Minister Youssef Boutros-Ghali said he expected the economy to grow between 4 to 4.5 per cent in the 2008/2009 fiscal year, which began on July 1, from 7.2 per cent a year earlier.