Egypt Has Spent 7 Bln of 29 Bln Pound Stimulus Package- Minister

Egypt has spent 7 billion Egyptian pounds of a package of 29.7 billion intended to stimulate an economy ravaged by more than two years of political turmoil, Planning Minister Ashraf al-Arabi said on Saturday.

Many tourists and investors have stayed away since a popular uprising ousted autocrat Hosni Mubarak in 2011. The army’s removal of the elected Islamist president, Mohamed Morsi, last July after months of protests has failed to bring calm back to the streets.

Gulf states, mistrustful of Morsi’s Muslim Brotherhood, have pledged over $12 billion in aid to help Egypt overcome its balance of payments crisis and avoid painful austerity measures that could ignite more popular unrest.

The most populous Arab country, whose GDP grew a mere 2.2 percent in the financial year ending June 2013, low for an emerging economy, launched a 22.3 billion pound stimulus package in August, increasing it later to just short of 30 billion.

Officials hope that, with the stimulus package, growth could reach 3.5 percent by the end of June 2014. They also hope to lower the budget deficit to 10 percent of GDP this fiscal year, ending June 2014, from 14 percent last year, despite increasing government spending by 35 percent to 85 billion pounds.

The government has paid off 1 billion pounds’ worth of arrears to contractors and expects to pay off another 1 billion pounds before the end of December, Arabi said.

Source: Reuters