Egypt’s economy is likely to keep growing by more than 4 percent, while the government boosts its economic stimulus package, although next year promises to be difficult for the budget, its Prime Minister said on Friday.
Ahmed Nazif also said in an interview he expected inflation, which fell to 11.7 percent in the year to April, would decline to single digit levels during the summer.
State revenues from tourism and Suez Canal receipts were starting to show improvement, he told Reuters Television on the sidelines of the World Economic Forum at the Dead Sea, Jordan.
“There are certain fundamentals in Egypt that we can rely on at least to keep the economy growing, not maybe at the 7 percent that we’ve seen over the last three years but at least keep it above the 4 percent level which it is today,” Nazif said.
The most populous Arab country’s budget deficit would stand at around 6.8 percent of gross domestic product this fiscal year before rising next year, Nazif said.
“We’ll allow the budget deficit to grow a little bit more than it is,” Nazif said, describing plans by Egypt to spend an additional $3 billion in the second half of the year to extend its economic stimulus package.
“We’ve been very successful in the last four years, we got it down from 11 percent of GDP. This year we’ll close at 6.8 percent,” Nazif said. Egypt’s fiscal year begins July 1.
“I think it might sneak up on us a little bit to about 8 percent.”
Egypt’s revenues from the Suez Canal and tourism are declining as economies around the world face recession.
But Nazif said revenues from both sectors in April had improved on their performance in March. “At least we’re not seeing the free downfall that we’ve seen since last fall,” Nazif said.