Prime Minister: Egypt's Emerging Market Economy Back on Track
Egypt's emerging market economy is "back on track" after being hit by the Asian financial crisis, declining oil and tourism revenues and other factors, Prime Minister Atef Ebeid declared Tuesday.
Ebeid, speaking to an international economic conference here, said Egypt would now forge ahead with the long-awaited privatization of state-run firms such as Telecom Egypt and electricity distribution.
He gave no date.
"Thank God things are back to normal," Ebeid told the conference. "This year we're back on track."
He forecast growth in Gross Domestic Product at 5.5 percent with inflation projected at 2.4 percent.
He said in the last year non-oil exports had increased 23 percent, while imports declined by 9.7 percent.
Tourism and oil, which are mainstays of the economy as they account for billions of dollars in revenue, were now increasing following a period of decline, he said.
He also said that new laws aimed at drawing investment -- laws on mortgage, capital markets, and intellectual property rights -- would be submitted to parliament shortly.
He pledged a stable currency despite a recent "adjustment."
The authorities have allowed the pound to drop about five percent against the dollar over the past three months in order to ease a yearlong liquidity crisis affecting both the dollar and the pound.
Foreign investors had balked at investing in Egypt amid fears the Egyptian pound would be devalued against the dollar. Some analysts expect further devaluation.
A US Embassy report published last month said earlier Egyptian government projections of the country's economy sustaining a 6 percent growth level were overly optimistic.
Businessmen, investors and analysts see the economy "as in grip of a downturn" from such factors as "foreign exchange shortages, slow export growth, high inventory levels, and trade disruptive government policies," it said.
However, as the tourism sector has grown by 43 percent in the first two quarters of the 1999-2000 financial year compared with the previous year, the government expects the foreign exchange receipts to expand, the deficits in trade and in current accounts to decrease and accordingly improve Egypt's monetary situation – CAIRO (AFP)
© 2000 Al Bawaba (www.albawaba.com)
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