Wanderlust…

The International Reporting (and Life) Adventures of Vivian Salama

Egypt Calls on Nations to Provide Economic Assistance

Posted by vmsalama on February 15, 2011

By Vivian Salama and Mariam Fam

Click here for original story

Feb. 15 (Bloomberg) — Egyptian Foreign Minister Ahmed Aboul Gheit called on the international community to offer support for the economy, saying it “has been greatly affected by the political crisis that has rocked the country.”

The protests that culminated in the Feb. 11 ouster of the former president, Hosni Mubarak, have led businesses to shut down, scared off tourists and pushed up Egypt’s borrowing costs. The Mubarak-appointed government, now running the country under military oversight pending elections, is forecasting slower growth. It has promised a stimulus plan to address the economic complaints of the demonstrators, such as high unemployment.

Egypt’s finance minister, Samir Radwan, said yesterday the country’s budget deficit will widen to about 8.4 percent — less than some analysts forecast — as spending increases and economic growth slows after Mubarak’s fall. The Institute of International Finance in Washington predicts the budget gap will be 9.5 percent of gross domestic product, rather than the 7.9 percent previously forecast by the government.

The turmoil has cost the nation about $1.5 billion of tourism revenue, according to Central Bank Governor Farouk El- Okdah. It has also forced companies to close and sent the currency skidding to a six-year low. Before Mubarak’s resignation, the benchmark EGX30 Index tumbled 16 percent in one week. The bourse has been closed since Jan. 27.

Economic Growth

Aboul Gheit said U.S. Secretary of State Hillary Clinton, as well as British Foreign Secretary William Hague and Saudi Foreign Minister Faisal bin Abdulaziz bin Faisal al-Saud were among the officials who have called him to discuss support and developments in the country, according to a statement posted on the ministry’s website late yesterday. (click here to read more…)

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