Egypt foreign investment drops to ‘almost zero’



REUTERS

Published — Friday 22 February 2013

Last update 22 February 2013 4:04 am

| نسخة PDF Print News | A A

CAIRO: Egypt plans to invite an IMF mission to Cairo within a week, the government said, flagging an early resumption of negotiations for a $ 4.8 billion loan as it struggles with an acute foreign currency shortage.
Planning Minister Ashraf Al-Araby said foreign investment had all but dried up, predicted a huge budget deficit as food and fuel subsidy bills soar, and announced data also underlining the depth of Egypt’s crisis before elections expected in spring.
Araby said growth had been just 2.2 percent year-on-year in the December quarter, noting that strong investment was needed to reach seven percent — an annual rate economists see as needed to soak up the waves of young people entering the labor market.
He also predicted the budget deficit could hit 10 percent of annual economic output in the financial year to June, a level Egypt cannot afford without outside help.
“The Egyptian economy is recovering extremely slowly due to the security and political situation,” Araby’s ministry said in a statement.
Analysts had expected the government of President Muhammed Mursi to try to delay a deal with the International Monetary Fund until after the parliamentary elections, as the loan’s terms will demand highly unpopular austerity measures.
However, Araby predicted rapid movement. “God willing, we expect to invite the IMF delegation within days,” he said. Asked to be more specific, he said: “Within days, no more than a week.”
Egypt’s upper house of parliament has adopted a revised electoral law, clearing the way for Mursi to call the lower house polls expected to be held in April or May.
Egyptians are angry as the crisis drags ever more of them into poverty. Cairo reached an initial agreement with the IMF on the loan in November but postponed ratification the next month due to violence on the streets.
This followed Mursi’s move to expand his powers and push through a new constitution seen by opponents as favoring his backers in the Muslim Brotherhood and more hard-line parties.
Araby announced foreign investment in Egypt was dire in the six months to the end of December — the first half of Egypt’s financial year.
“We had almost an absence of new direct foreign investments during the first half of the year,” he said.
Egypt’s pound has tumbled 8 percent against the dollar this year as its international reserves fell to $ 13.6 billion, less than the $ 15 billion needed to cover just three months’ imports.
This drop has inflated the budget deficit by forcing up the cost of subsidizing energy and food staples, such as bread.


The government announced new fuel prices for many sectors of the economy on Tuesday which industry sources said were 50 percent higher than previous levels, drawing protests by factory owners affected by the increase. (Full Story)
Private industry and individuals are struggling to borrow or get access to dwindling supplies of dollars.
Mahdi Ibrahim, who runs an import-export business with Brazil, expressed anger about problems in getting hold of even relatively small sums in dollars — difficulties which are forcing businesses to turn to the black market for funds.
“I have pulled all my money out of the bank because of the restrictions on my ability as a client to buy dollars or transfer hard currency abroad. I have business to take care of abroad,” he said.

What's happening around Saudi Arabia

JEDDAH: A Mercedes car with a Saudi number plate was spotted in Israel. The discovery led to intense discussion on social media websites on Tuesday.According to reports, the car was spotted last week in Jaffa’s Clock Tower Square by Jacky Hugi, the M...
RIYADH: The Kingdom is experiencing extremely hot weather conditions.According to a report from the Presidency of Meteorology and Environment (PME), Central Province, Jeddah, Makkah and Madinah, experienced “extremely hot weather with surface winds a...
ALKHOBAR: Many Saudi citizens travel outside the Kingdom during vacations looking for entertainment for themselves and their families as entertainment facilities in the Kingdom do not meet their aspirations. They have called for setting up entertainm...
TAIF: Makkah Gov. Prince Khaled Al-Faisal inaugurated state-of-the-art Radf public park in Taif which has an interactive fountain — the biggest of its kind in the Kingdom and spread over 13,000 sq meters. The fountain has colored lighting and a displ...
JEDDAH: The Special Criminal Court has issued a preliminary order in a case related to a Saudi national who fought with militant organizations in Syria. The court, functioning at its summer headquarters in Jeddah, sentenced him to a seven-year jail t...
RI YADH: The Kingdom has decided to increase the financial aid to Palestine by raising its monthly aid to the Palestinian Authority’s budget from $14 million to $20 million. The substantial increase brings Saudi Arabia’s yearly aid for Palestine to $...
JEDDAH: The Saudi Ambassador to Jordan has rejected terror charges against Saudis incarcerated in Iraqi jails and slammed the government of that country for concealing information on the inmates."The file of Saudi prisoners in Iraq has grabbed the at...
JEDDAH: Six female members of the Shoura Council participated in a training program to raise awareness among citizens on the municipal elections in which women will participate. The program was organized by Al-Nahda Philanthropic Society for Women un...
RIYADH: Custodian of the Two Holy Mosques King Salman has issued an order appointing and promoting 96 members at the Bureau of Investigation and Public Prosecution (BIPP) at various ranks.Sheikh Mohammed bin Fahd Al Abdullah, BIPP president, expresse...
DAMMAM: After the recent increase in verbal and physical harassment of women and girls in the Kingdom, they have turned to martial arts in order to protect themselves. Amani Yassin, a coach at Taekwondo Training Institute, said: “Saudi women are inte...
RIYADH: A youth has been arrested for allegedly killing a Saudi man near the Madinah airport recently. The police apprehended the alleged killer without incident. The suspect, a 24-year-old Saudi, is alleged to have stabbed the victim several times...
RIYADH: A total of 4,326 male and female students started their local and regional summer program for 2015 under the sponsorship of the King Abdul Aziz and his Companions Foundation for the Gifted and Creativity (Mawhiba) throughout the Kingdom on Su...
BURAIDAH: The security patrolling team in Qassim detained a woman for driving a car on the streets of Buraidah.Her case was referred to the higher-ups for necessary action.According to Maj. Badar Al-Sahibani, spokesman Qassim police, the woman is ide...
RIYADH: Recent statistics announced by the Saudi Commission for Health Specialties, which coincided with consensus surveys in the Kingdom for the year 2014, revealed that there is only one doctor for each 800 people, and one nurse for every 285 peopl...
Indian expats have paid glowing tributes to one of its most beloved presidents and iconic leaders on Tuesday, as condolences poured in from various parts of the Kingdom for A.P.J. Abdul Kalam following his sudden death on Monday.Hemant Kotalwar, char...

Stay Connected

Facebook