Egypt eyes new stimulus package - agency

Egypt eyes new stimulus package – agency

The first stimulus was for $2.6 billion.

October 19, 2010 3:05 by Reuters

The Egyptian government may propose a new stimulus package to boost domestic demand should global economic developments slow growth at home, the official news agency quoted a minister as saying on Tuesday.

The stimulus, which would be adopted in the fiscal year that ends on June 30, would be similar to measures taken by the government early in the global downturn, Minister of Economic Development Osman Mohamed Osman told MENA.

The financial crisis that began in 2008 reduced Egypt’s Suez Canal revenue, foreign investment, tourism and remittances from Egyptians living abroad, lopping more than two percentage points off growth.

Osman said the repercussions of the financial crisis were continuing to hurt global economic growth in both advanced and emerging markets, MENA reported.

The package would be the fourth adopted by Egypt since the global crisis started.

The first stimulus, introduced in October 2008, was for 15 billion Egyptian pounds ($2.6 billion). The second, included in the June 2009/10 budget, was for 8 billion pounds and the third for 11.2 billion.

Egypt last week cuts its gross domestic product (GDP) growth figure for the 2009/10 fiscal year to 5.1 percent from a previously stated 5.3 percent.

Growth in 2008/09 dropped to 4.7 percent from 7.2 percent in 2007/08.

The government said last month it expected the economy to grow by at least 6 percent this fiscal year.

In a newspaper interview published last month, Prime Minister Ahmed Nazif said Egypt did not need a new stimulus package “as the economic indicators show that the Egyptian economy is advancing by firm steps from one quarter to another.”

(Reporting by Sherine El Madany; Editing by John Stonestreet)