Egypt July-Sept GDP growth slows to 5.8%

CAPITAL FLOWS: Egypt has benefitted from significant investment from the Gulf in recent years. (Getty Images)

The world financial crisis has knocked 1.4 percentage points off the rate of economic growth in Egypt, where the economy expanded by 7.2 percent in the financial year which ended in June.

Growth in the July-September quarter, the first of the new financial year, fell to an annualised rate of 5.8 percent, cabinet spokesman Magdy Rady said on Wednesday.

That compares to 6.6 percent in the April-June 2008 quarter and 6.9 percent in the July-September 2007 quarter, according to data from newswire Reuters.

Rady said growth in the construction sector, one of the engines of overall growth in recent years, fell to 9.5 percent in the July-September quarter, from 14 percent in the same quarter of last year.

But growth in the tourism and telecommunications sectors held steady at 10 percent and above, he added.

"All sectors have been affected by the international crisis except for communications, tourism, and oil and gas, which grew 9 percent in the first quarter, compared to 2 percent in the same period of last year," he said.

The Egyptian government has said growth in the current financial year, which ends in June 2009, could drop to around 6 percent as the global crisis hits revenue from tourism, exports, and the Suez Canal.

Growth at 7.2 percent in the 2007/08 financial year was the highest in over 20 years, helped by petrodollar investments from the Gulf Arab region. (Reuters)

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