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A 2009 rarity: inflation rate falls
According to the Central Bank of Egypt, urban inflation decreased by 0.1 percent month-on-month in November, which put the annual rate at 13.3 percent. It was the first monthly drop in the inflation rate since December 2008. In August 2008, it reached 23.6 percent.
The central bank attributed the slight decline to lower prices for fruits and vegetables, which for the nine months had been a primary cause of inflation. Additionally, the bank calculated the annual core inflation rate at 6.6 percent in November, compared to 6.5 percent in October, due mostly to lower food prices.
Meanwhile, net international reserves inched up slightly to reach $34.11 billion by the end of November, compared to $34 billion the previous month.
Fourth stimulus possible; GDP rises
After unveiling a third stimulus package, worth LE 10 billion, in October, the Ministry of Finance announced on its website on November 25 that it would consider another package in a few months. The third stimulus was earmarked for infrastructure projects and follows stimulus packages of LE 15 billion in October 2008 and LE 8 billion in June. All three packages were financed through borrowing; only the first package has been entirely spent.
Egypt’s gross domestic product (GDP) grew 4.7 percent in FY 2008-09, ending June 30, and then 4.9 percent from July through October. Minister of Finance Youssef Boutros-Ghali has said he expects 5 percent growth in FY 2009-10. Gross domestic debt stands at 77 percent of GDP and total debt at 87 percent, said Boutros-Ghali.
Swine flu deaths soar in December
On December 23, there were 75 reported swine flu-related Egyptian deaths for the month, pushing the total to 86 for the year. H1N1 cases and fatalities occurred in 12 of Egypt’s 29 governorates: Cairo, Alexandria, Aswan, Helwan, Minya, Giza, Gharbiya, Assiut, Qena, Sohag, Fayoum and Daqahliya. The Ministry of Health attributed the spike in cases resulting in deaths to the onset of winter. The majority of cases involved pregnant women or individuals with pre-existing medical conditions.
Canal revenues off 13 percent for month
According to the website of the Suez Canal Authority, revenue dropped 13 percent year-on-year to $365.5 million in November from $419.8 million a year earlier. The number of ships transiting the canal fell 20 percent to 1,418 in November from 1,770 in November 2008.
International press quoted a spokesperson for the canal authority as saying transit tolls will remain unchanged in 2010.
The Suez Canal, which has seen a significant decline in revenue year-on-year every month beginning December 2008, is a major source of foreign currency for Egypt.
Government launches training initiative
Minister of Finance Youssef Boutros-Ghali has launched an initiative to train owners of micro and small enterprises to enter government bids and tenders, the State Information Service reported on November 30. The program includes training in the legal, technical, financial and administrative aspects of the process, said Boutros-Ghali.
First phase of Maadi tech zone completed
The first phase of the technological zone in Maadi has been completed at a cost of LE 250 million, the State Information Service quoted Minister of Communications and Information Technology Tarek Kamel as saying on November 29. The first phase includes three buildings and is expected to create 6,000 jobs.
The new technology zone was modeled on the Smart Village located on the Cairo-Alexandria Desert Road, which has managed to attract substantial international investment, said Kamel.
Company targets investment in Africa
According to State Information Service reports on December 3, the first Egyptian shareholding company for investments in Africa has been established. Mona Omar, assistant foreign minister for African affairs, said the company would focus on investments in the countries of the Nile basin and preparations are under way for the first meeting since 1989 of the Egypt-Congo joint committee.
The service also quoted her as saying that there are promising investment opportunities in the region, noting that changes to previous agreements with Congo and Uganda will prevent dual taxation.
Car sales show substantial gain
Car sales in Egypt totaled 16,212 in October, an increase of 25 percent year-on-year, according to the Automotive Marketing Information Council. The increase, reported in the local press on December 2, may signal a boost in consumer confidence and a recovery of the automotive sector in Egypt.
Government considers four oil, gas projects
Four proposed agreements for oil and gas exploration with companies from the UK, the Netherlands, Italy, France and Malaysia have been discussed in the People’s Assembly. The State Information Service (SIS) reported on November 29 that the agreements could attract about $583 million in investment. Minister of Petroleum Sameh Fahmy was quoted by the SIS as saying that international investment in Egypt’s oil and gas sectors has continued despite the global financial crisis.
Ten agreements for exploration of oil, gas and gold in Egypt worth $2.2 billion in investment were signed in August.
Egypt to open new tire factory
Plans are under way to build the Middle East’s biggest car tire factory in Ameriya, west of Alexandria. According to December 20 press reports, the factory is expected to take two years to build, cost LE 600 million ($109 million) and have the capacity to produce 1.5 million tires a year. The factory will be financed by Egyptian, Arab and other foreign investors. Domestic tire producers face stiff competition from China.
Car accident kills three German tourists
Three German tourists were killed on December 13 when their vehicle was struck by a freight train near Safaga, an Egyptian Red Sea resort town. International press reported that the tourists were taken to the hospital in Hurghada.
There are an estimated 6,000 deaths and 30,000 injuries on Egypt’s roads each year.
Louvre returns mural fragments
Ancient Egyptian mural fragments that were taken from a Luxor tomb and housed in the Louvre were returned to President Hosni Mubarak by French president Nicolas Sarkozy on December 14. According to press reports, the five steles were chipped off a wall painting in the 3,000-year-old tomb of Tetiky. The Louvre purchased the relics in 2000 and 2003, and kept them in storage. Egypt demanded their return in October and severed official ties with the museum.
Egypt has actively demanded repatriation of several ancient artifacts, including the Rosetta Stone at the British Museum and the bust of Queen Nefertiti in Berlin’s Neues Museum. A 1972 United Nations Educational, Scientific and Cultural Organization (UNESCO) convention declared that artifacts belong to their country of origin, and that illegally acquired items must be returned.
In related news, a 9-ton temple pylon was extracted from the harbor of Alexandria on December 17. Local press reported that the estimated 2,050-year-old pylon, measuring 2.6 meters in height, once stood at the entrance to the temple of Isis, a Pharaonic goddess of fertility and magic. The pylon is made from a single slab of red granite quarried in Aswan.
Egypt and Iraq sign tourism memorandum
According to the State Information Service, a memorandum of understanding was signed on December 13 by Minister of Tourism Zoheir Garana and his Iraqi counterpart, Qahtan Abbas al-Jabburi, meant to foster bilateral cooperation. Garana said he hopes Iraq will benefit from Egypt’s experience and expertise in tourism, and al-Jabburi said tourism in Iraq is increasing and fast becoming an important source of foreign currency for his country.
CBE holds steady on interest rates
In a December 24 meeting, the Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) kept key interest rates unchanged. The overnight deposit and lending rates remained at 8.25 percent and 9.75 percent, respectively, while the discount rate remained 8.5 percent.
It was the second consecutive meeting of the MPC where interest rates were kept constant and comes on the heels of six cuts to both the overnight deposit and lending rates. The discount rate was last cut at the end of July, in what was the fifth consecutive reduction in the rate.
A statement released by the MPC said that annual core inflation, which came in at 6.6 percent in November, “remains within the CBE’s comfort zone.” The statement noted that GDP growth of 4.9 percent in the first quarter of FY 2009-10 “reflects a steady improvement in economic activity.” The report also pointed to positive developments in the international economy, combined with local fiscal and monetary measures, saying this will supply a favorable environment for the domestic economy.
“Against this background, the MPC assesses that the current level of policy interest rate is appropriate and supportive of the economic recovery while consistent with maintaining core inflation within the CBE’s comfort zone in the medium term,” the statement said. “The MPC will continue to closely monitor all economic developments and will not hesitate to adjust the key CBE rates to ensure price stability over the medium term.”
Russian ministers on missions to Egypt
Russia’s foreign minister and its minister of industry and trade came to Egypt last month, in two separate visits.
Russian foreign minister Sergey Lavrov met with both President Hosni Mubarak and Foreign Minister Ahmed Aboul Gheit. The two foreign ministers signed a plan governing cooperation in 2010.
The Russian trade minister, Victor Khristenko, met with his counterpart, Rachid Mohamed Rachid, Egypt’s minister of trade and industry. The two ministers discussed the timing for negotiations to conclude a free trade agreement (FTA) between the two countries. A statement from Egypt’s Ministry of Trade & Industry (MTI) said that negotiations on an FTA between the two countries will begin early this year.
The MTI statement put bilateral trade between the two countries at $2.07 billion in 2008, and total Russian investments in Egypt at LE 727.3 million by April 2009. The trade and industry ministers talked about a shared desire to increase bilateral trade to $4 billion in the coming years.
Archive digitization project inaugurated
A project to digitize Egypt’s national archives was inaugurated last month by Prime Minister Ahmed Nazif. The project is the result of cooperation between the Ministry of Culture and the Ministry of Communications & Information Technology dating back to 2005, and a database containing upwards of 25 million records has already been completed.
The initiative will work to increase Arabic e-content on the Internet, and IBM is one of the companies in the consortium that was involved in the implementation of the project.
The inauguration of this project came on the heels of Egypt registering the first Arabic script domain name on the Internet, in November. n
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