Egypt’s export growth will probably slow this year as the economies of its major trading partners suffer from the international financial crisis, Egypt’s Trade and Industry Minister Rachid Mohamed Rachid said.
In an interview with Reuters on Thursday evening, he said he hoped Egypt’s exports would rise 20% to 25% this year but he said the outlook was uncertain.
Egypt’s non-oil exports reached $14,883-billion in the fiscal year ending in June.
”This was a growth of about 30% from the year before … We hope this year we will achieve something like 20% to 25% growth,” Rachid said in a telephone interview.
”But of course with the decline of prices globally and the demand softening in our major exports markets, which are Europe and the United States, we are also expecting some drop in our exports — not only this year but maybe even next year, but it is very difficult to predict at this stage.”
”We have not seen numbers properly, we are still having some quotes ranging about 20% between June till now.”
He said he was concerned about a fall in exports of construction materials and chemicals, both boom industries in recent years.
”As you know the prices have been dropping for products like cement and all production materials and petro chemicals, so of course they are of concern to us,” he said.
He said that so far the Egypt’s financial sector had seen a limited fallout from the international financial crisis.
”But we know very well that we will not have the same favorable position when it comes to the economic situation,” he said.
”We see the possible impact on our exports, on tourism, on our Suez Canal income, so all in all foreign direct investment will be harder to get than before.”
But he said the government was still hoping that the economy would grow ”about 6%” this year.
Egypt’s central bank will meet to discuss interest rates on Friday and it is expected to keep interest rates on hold.
Asked whether he thought there should be an interest rate cut, he said: ”We will leave it to the central bank. We understand that the importance in the next period will definitely be on the availability and cost of financing.
”Everybody around the world is concerned about that. But we have been really shielded from the financial crisis because of the central bank performance and we have trust in them.”
Rachid was speaking from Nice where he had been attending a Euromed meeting of industry ministers from around the Mediterranean.
He said they had agreed to meet in Cairo in January to discuss funding for joint projects including on energy, maritime transport and to clear up pollution in the Mediterranean.
Sovereign wealth funds and investment banks would be invited to attend.
Asked about the prospects for the Doha round of trade talks, he said: ”Everybody was waiting for the new American administration. Now … there is a very strong possibility that the round could have some wind behind it in the next weeks and months to come expecially that there is the concern … that protectionism will come back if there is a recession in the world.” – Reuters