Egypt eyes 4-4.5 pct growth in 2012/13: Minister

Egypt’s interim government expects 4 to 4.5 percent growth in the economy for the fiscal year that starts on July 1, a minister said on Monday.

Growth has tumbled in the wake of Egypt’s uprising that toppled Hosni Mubarak in February 2011. Economists predict it will rise by just 1.6 percent in the fiscal year 2012/13.

Last week, the government submitted its draft budget for 2012/2013 that included 15 percent increase in spending.

“The government aims to increase the growth rate to 4 to 4.5 percent, which is a bold rate given the current circumstances, by making larger investments,” International Cooperation Minister Faiza Abul Naga told reporters.

Finance Minister Mumtaz al-Saeed said spending in the budget would be 537.7 billion Egyptian pounds ($89.15 billion), adding that the deficit would be about 140 billion pounds.

His numbers differed from a previously stated spending figure of 516 billion pounds with a deficit of 170 billion pounds.

Saeed said the state’s revenue from taxes and tariffs would boost its income to 392.4 billion pounds next year from 349.6 billion this year. He said government investment would increase by 10.3 percent in the coming year.

The budget is currently awaiting approval from the country’s army rulers and elected parliament.

Social justice and the fair distribution of wealth were the main reasons that erupted last year’s uprising against Mubarak.

The government of army-appointed Prime Minister Kamal al-Ganzourir is expected to resign by early July after the election of a new president. A presidential vote starts on May 23-24.

When it announced the 2011/12 budget in June last year, the government had put spending at 490.6 billion pounds, up 14.7 percent from the previous year.

In March, the finance minister put the deficit for the current year at 144 billion pounds.

Many economists believe the political and economic turmoil since last year’s uprising, which has eaten into revenue and increased demands for higher wages, could end up pushing the actual deficit much higher.

Egypt has asked to borrow $3.2 billion from the International Monetary Fund to help it plug next year’s deficit, but the IMF is insisting the government put together a program that reins in spending or comes up with new sources of revenue.

A survey of 11 economists in March forecast, year-on-year gross domestic product (GDP) will grow by 1.6 percent in the financial year starting on July 1, 2012, but will rise to 4.0 percent the following year. ($1 = 6.0365 Egyptian pounds)