EGYPT'S ECONOMY: JULY 20 PRESS ROUND-UP

UNCLAS CAIRO 001396

SIPDIS

STATE FOR NEA/ELA

E.O. 12958: N/A
TAGS: ECON EINV EFIN ETRD ENRG PGOV EG
SUBJECT: EGYPT'S ECONOMY: JULY 20 PRESS ROUND-UP


1. (U) The following are notable economic news stories that appeared
over the past week in the Egyptian press:

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Bank Launches Mortgage Finance Program
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2. (U) The National Bank of Egypt (NBE),Egypt's biggest bank,
launched the largest mortgage finance program in local history. The
LE10 billion (US$1.79 billion) mortgage program will target limited-
and medium-income wage earners in particular. Tarek Amer, NBE
Chairman, said that the bank plans to provide borrowers with 20-year
loans to finance 80% of the cost of homes valued at a minimum of
LE40,000 (US$7,143) and a maximum of LE3 million (US$540,000). (Al
Alam Al Youm, 7/15/2009)

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Egypt Extends Ban on Cement Exports
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3. (U) Minister of Trade and Industry Rachid Mohamed Rachid
announced that the Government of Egypt (GOE) has extended a ban on
most cement exports to October 1, 2010, in order to deal with
growing local demand, which has risen 26% in the first half of 2009
over the same period last year, and to stabilize domestic prices.
Rachid stated that the GOE has extended the export ban on gray
clinker and gray Portland cement, which dominate Egypt's cement
export industry. The minister had previously announced in April a
four-month ban on cement exports. (Al Alam Al Youm, 7/16/2009)

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Trade Deficit Decreasing
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4. (U) A recent report by the Central Agency for Public Mobilization
and Statistics (CAPMAS) showed that Egypt's trade deficit decreased
by 11.9% in April 2009 compared to the same month last year, from
LE9,811 billion (US$1.75 billion) to LE8,647 billion (US$1.54
billion). The report also indicated that the month-to-month value of
non-oil exports rose 7.9% from April 2008 to April this year,
reaching LE7,512 billion (US$1.34 billion). (Al Ahram, 7/15/2009)

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Oil and Natural Gas Production Increases
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5. (U) A report by the Egyptian General Petroleum Corporation (EGPC)
showed that production of crude oil increased 6% in FY2008/09 over
FY2007/08, to 675,000 barrels per day. Natural gas production also
rose to 6.4 billion cubic feet (BCF) per day compared to 6.0 BCF per
day in FY2007/08. As of June 30, according to the report, Egypt's
crude oil reserves were 4.4 billion barrels and natural gas reserves
amounted to 77 trillion cubic feet. (Al Alam Al Youm, 7/15/2009)

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GOE Releases FY2009/10 GDP Growth Objectives
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6. (U) The Minister of Economic Development, Osman Mohamed Osman,
announced that the GOE plans to use its economic and social
development programs to boost GDP to LE1,181 billion (US$210.89
billion) in FY2009/10, with a growth rate of approximately 4%,
compared to LE1,040 billion (US$185.71 billion) in FY2008/09. Osman
stated that achieving this growth rate would allow the economy to
counter the negative impact of the global economic slowdown and
generate higher growth once the crisis has run its course, with GDP
growth projected to rise to 5% in FY2010/11. Osman said that in
FY2009/10 income from manufacturing, tourism and the Suez Canal is
expected to grow by 3.8%, 8.7% and 8%, respectively. However, the
GOE also expects unemployment to rise to 9.5% in FY2009/10. (Al
Ahram, 7/14/2009)

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Stock Exchange Postpones Derivatives Trading
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7. (U) Mohammad Omran, Deputy Chairman of the Egyptian Stock
Exchange, said that the introduction of derivatives to the Egyptian
stock market would be postponed until 2011, instead of by the end of
2009 as had been planned previously. Omran attributed the delay to
the global financial crisis, which has caused a decline in trading
volume. (Al Ahram Al Eqtesady, 7/13/2009)