Minister: Egypt growth to slow to 3 percent in second half of 2014/15

Egypt’s economic growth is projected to slow to three percent in the second half of the 2014/15 fiscal year, Minister of Planning Ashraf al-Araby said on Wednesday. The growth rate for the entire year is likely to be around four percent, according to the state-owned Middle East News Agency. 

This figure is roughly in line with government estimates for the year. In January, Finance Minister Hany Kadry Demian predicted 2014/15 would see GDP growth “north of four percent.”

Egypt’s economy started the fiscal year with a strong 6.8 percent growth rate in the first quarter. The rise was partly aided by base effects from weak growth in the same quarter the year before, but also bouyed by strong performance in the manufacturing and tourism sectors. Growth slowed to 4.3 percent in the second quarter, bringing the figure for the first half of the year to 5.6 percent. 

Official figures have not yet been released for the third quarter, which ended March 31, but the planning minister’s figures indicate that the slow down in growth is likely to continue.

This tallies with other figures. After showing signs of recovery in the first quarter, before beginning a sharp decline in the second and third quarters. The industrial sector has also slowed, according to figures from state statistics agency CAPMAS. 

Economists estimate that Egypt needs annual GDP growth of roughly seven percent to see real economic improvement, due to the rapidly growing population and the large cohort of entrants to the job market each year.