Cablegate: Egypt's Economy: December 14 Press Round-Up

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DE RUEHEG #2294 3481426
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R 141426Z DEC 09
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 4443
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC

UNCLAS CAIRO 002294

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STATE FOR NEA/ELA

E.O. 12958: N/A
TAGS: ECON EINV EFIN ETRD EAGR ENRG PGOV EG
SUBJECT: EGYPT'S ECONOMY: December 14 PRESS ROUND-UP

1.(U) The following are notable economic news stories that appeared over the past week in the Egyptian press: --------------------------------------------- ------ Minister of Economic Development Predicts 6% Growth --------------------------------------------- ------

2.(U) Minister of Economic Development Osman Mohamed Osman said he expects robust growth rates exceeding 6% in FY 2009/10, and climbing to 7-8% during FY 2010/11. Osman said the real growth rate approached 5% during the first quarter of FY2009/2010, which he termed a good rate amidst the global financial crisis (Al Alam Al Youm, Al Ahram 12/7/09). -------------------------------------- Dubai Scales Back Egyptian Investments --------------------------------------

3.(U) In the first actions taken to liquidate Dubai Holding investments in Egypt, Dubai Financial sold a 5% share of EFG-Hermes, a major Egyptian investment bank. Dubai Financial sold its shares at a LE 700 million ($128 million) loss from their purchase price in 2007. The Dubai Ports company also announced that it would suspend its planned $1.3 billion in investment projects around the Egyptian port of Ain Sukhna (Al Mal, Al Alam Al Youm, Al Shorouk, Al Ahram, 12/8/09, 12/10/09). --------------------------------------------- --- Rachid Calls for Continued Action against Crisis --------------------------------------------- ---

4.(U) In a meeting with the Federation of Egyptian Industries, Minister of Trade and Industry Rachid M. Rachid said he expects negative repercussions of the global financial crisis to continue during 2010, and possibly 2011. Rachid called for continuing the GOE's support for industry and exporters (Al Mal, Al Alam Al Yom, 12/8/09). --------------------------------------------- -- 23% Increase in Internet Users in Egypt in 2010 --------------------------------------------- --

5.(U) A report by the research group of CI Capital predicts that Internet users in Egypt will grow by 23% in 2010, along with a 16% growth rate for mobile phone users and a 5% growth rate in fixed line telephone users (Al Shorouk, 12/7/09). --------------------------------------- Apache to Boost Oil and Gas Exploration ---------------------------------------

6.(U) After a meeting with Steve Farris, CEO of the US-based Apache company, Minister of Oil Sameh Fahmy said that Apache plans to invest an additional $1 billion in oil and gas exploration, particularly in the Western Desert region (Al Alam Al Youm, 12/9/2009). ------------------------------------ Mubarak Calls for Supporting Farmers ------------------------------------

7.(U) In a speech in the Upper Egyptian governorate of Minya, President Hosni Mubarak asserted that the government is committed to supporting farmers and is encouraging investment in Upper Egypt. Mubarak also warned against a population explosion (Al Akhbar, 12/7/2009). ------------------------------------ Budget Deficit Up 3.4% Over 4 Months ------------------------------------

8.(U) Minister of Finance Youssef Boutros-Ghali announced that the budget deficit had risen by 3.4% from July 2009 to October 2009. Boutros-Ghali attributed the rise a decrease in government revenue caused by the slowdown in economic activity due to the global financial crisis (Al Ahram, 12/10/2009). SCOBEY

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