AFRICANGLOBE – Egypt’s newly-appointed finance minister said on Wednesday that political instability would cause the economy to grow more slowly this year than earlier official forecasts showed, with the budget deficit also bigger than thought.
Hany Kadry Dimian, a former finance ministry official who took the top job last month, said the state’s budget deficit for fiscal year 2013/14 will be around 12 percent and expected it to stand at 10-10.5 percent for the next fiscal year.
“In best conditions it (this year’s deficit) will be around 11 to 12 percent and leans more to more than 12 percent.” Dimian told reporters.
Egypt’s economy has been hammered by three years of turmoil that followed a 2011 uprising that toppled President Hosni Mubarak.
A former finance ministry report released last year had expected the deficit to stand at 9.1 percent in 2013/14, down from 13.8 percent in 2012/13.
Dimian said he expected the economy to grow this year by 2-2.5 down from a previously targeted 3 to 3.5 percent.
Last January Egypt said it was targeting growth of between 4 and 4.5 percent next fiscal year.
He listed the political instability as a reason for lowering the growth expectation.
Dimian was appointed in a surprise cabinet reshuffle.
That came shortly before a presidential vote expected in two to three months and which army chief Field Marshal Abdel Fattah al-Sisi is mostly likely to win.
Sisi ousted Islamist President Mohamed Morsi last July in reaction to mass protests against his rule, a move that brought him wide popularity among ordinary Egyptians.
The newly formed cabinet vowed to do its best to achieve the people’s three long called-for demands of economic and security enhancements and achieving social justice for the millions of poor and illiterate Egyptians.