Frightening Decline in Growth Rate

[Hurghada Lady]

Frightening Decline in Growth Rate




The government has officially recognized a decline in the growth rate in October, November and December, the second quarter of the 2008/2009 fiscal year, to 4.1%.

Cabinet Spokesman Dr. Magdi Radi said: “It is a frightening decline, as we had estimated a growth rate of 5% in that period, but we cannot control it.”

He said the most affected sectors are the Suez Canal, where the income growth was only 1.4% (US$ 1.28 billion) as opposed to 22% in the same period of the year before, and the oil exports as a result of falling world oil prices.

A cabinet statement said that investments went down to LE 52.5 billion, with 67% from the private sector as opposed to 69% the previous year, and that only 3000 new companies were established as opposed to 3939 last year.

Also only 159,000 new jobs were created, of which 31,000 were abroad, compared to 181,000 last year, with 33,000 abroad, which led to an increase in the unemployment rate from 8.6% to 8.8%.

The statement also said that the inflation rate has decreased to 14% in January, and that it is expected to continue decreasing to 10% as of next March.

It said that the trade balance deficit has increased by 25% due to a drop in oil export earnings as a result of the declining world oil prices, whereas it had recorded a marked surge last year.