Egypt's Economic Growth Accelerates to 5.6% in Third Quarter of 2010

The Egyptian economy expanded an annual 5.6 percent in the third quarter, boosted by tourism, manufacturing and domestic consumption, cabinet spokesman Magdy Rady said today.

Growth accelerated from a revised rate of 5.4 percent in the previous three months. The government had initially said the economy expanded an annual 5.9 percent in the period between April and June.

“This is slightly better than our forecast,” said Alia Mamdouh, an economist at Cairo-based investment bank CI Capital. She had forecast 5.4 percent growth for the first quarter.

The government expects the economy to expand at least 6 percent in the current fiscal year ending June 2011, compared with a revised rate of 5.1 percent in the previous year. The economy of the most populous Arab country relies on manufacturing, tourism and foreign direct investment for growth. These factors helped gross domestic product expand at an average rate of 7 percent in the three fiscal years through June 2008.

Growth slowed to 4.7 percent in the following fiscal year due to the global financial crisis, prompting the government to boost public spending to offset the decline in private investments.

“We are not happy that public investments are more than private investments,” Rady told reporters in Cairo.

Egypt’s benchmark EGX30 stock index has gained 11 percent this year, according to data compiled by Bloomberg.

To contact the reporters on this story: Alaa Shahine in Cairo at asalha@bloomberg.net; Abdel Latif Wahba in Cairo at alatifwahba@bloomberg.net.

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net.

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