Egypt Prime Minister Ahmed Nazef said on Monday his country could maintain the momentum of economic growth and secure local and foreign investments through step-by- step reforms, despite the unfolding global economic crisis.
Addressing a conference organized by the Economist Intelligence Unit, a British think tank, and the Egyptian Government, Nazef said Egypt could ride out the crisis through incremental two-stage reforms, though the tourism sector, exports and Suez Canal revenues are hit hard by the economic slowdown.
"Thanks to financial and banking policies adopted by the Central Bank of Egypt, the country managed to overcome the first wave of the fallout of the financial crisis," he was quoted by the official MENA news agency.
The first stage of the reconstruction of the financial and banking sectors has been accomplished, he said, adding that the second stage will help fund the small- and medium-sized enterprises, which, according to official statistics, absorb 95 per cent of labours after years of privatization.
"Confidence in Egyptian economy encourages businessmen to pump more investments into Egypt," he added.
The government had refrained from cutting the benchmark interest rates despite worldwide slashes in the past five months, in a bid to cool down the sizzling inflation and buttress the local currency.
"The major challenge besetting us is soliciting jobs," he said, referring to the high unemployment rate in the most populous Arab country, where, according to the World Bank, 22 per cent of labours are jobless.
On Saturday, Egyptian Economic Development Minister Osman Mohamed Osman said the economic growth rate decreased to 4.
1 per cent in the second quarter of the 2008-2009 fiscal year, against 7.
7 per cent in the same period in the previous year, which reflects a tangible recession in key sectors.
Osman expected that Egypt's economic growth rate, recorded more than seven per cent in the past three fiscal years, will decrease to about five per cent by the end of the current fiscal year (from July 1, 2008, to June 30, 2009).
The Egyptian authorities have been taking necessary measures to curb the negative impact of the global financial crisis to the country's economy.
Due to a recent plunge of inflation rate, the Central Bank of Egypt said on Friday that it had decided to cut its key overnight interest rates by one per cent to 10.
5 per cent for deposits and 12.
5 for lending in a bid to boost the economic growth of the country.
As commodity prices ebbed worldwide, Egypt's inflation rate was down to 14 per cent in January, the lowest one since last April, compared with 18.
7 per cent in December, the country's Central Agency for Public Mobilization and Statistics said on Tuesday.