Egyptian economy heading for growth slowdown

by Alaa Shahine

Egyptian Finance Minister Youssef Boutros-Ghali said on Sunday his country was looking at a "serious contraction" in economic growth because of the global financial crisis.

"All the interaction with the outside world is coming practically to a standstill. Our exports are dropping, tourism is dropping, Suez Canal receipts are dropping, workers remittances are dropping," he said in a speech at the American University in Cairo.

"And therefore, we are looking at a serious contraction in growth in the Egyptian economy". He did not give a forecast.

Last month, Egypt's trade and industry ministry cut its growth forecast to an annualised rate below 5.2 percent in the first half of 2009 due to "sudden variables".

Boutros-Ghali's comments add further evidence that the global financial crisis is affecting the most populous Arab country, with two of Egypt's biggest sources of foreign currency - tourism and the Suez Canal - already showing signs of faltering.

The country's net foreign reserves fell $680 million in January to $33.43 billion, the central bank said last week.

Prime Minister Ahmed Nazif said in December that the Egyptian government had set its target for economic growth at 5.5 percent for the two years starting July 2008, after 7.2 percent growth in the 2007/8 financial year.

Boutros-Ghali also said on Sunday that forecasters at his ministry predict inflation will fall to single digits "in a matter of a couple of months".

"Therefore, the inflationary pressure has disappeared in the Egyptian economy," he said.

Egyptian urban inflation dipped to 18.3 percent in December, an eight-month low, as food prices retreated.

The head of Egypt's statistics agency said late last month that falling global prices for wheat, corn and butter would likely help inflation in Egypt fall for a fifth straight month in January.

Source : Reuters

Qatar National Bank Q3 profit surges to a record

Qatar National Bank (QNB), Qatar's largest lender by market value, topped analysts' forecasts with a record profit in the third quarter as it diversified its revenue sources.

The lender's third-quarter profit was 1.14 billion riyals ($313 million), up 75.7 percent from the year-earlier period, according to a calculation by newswire Reuters based on the bank's financial data.

Net income in the nine months to Sept 30 rose 62.2 percent to 3 billion riyals compared with 1.85 billion riyals in the year-earlier period, the lender said in a statement, without giving the quarterly figure.

QNB's results for the first nine months of 2008 are a reflection of the sustained growth in activities across business lines in Qatar and abroad," Chief Executive Ali Al-Emadi said in the statement.

Nine-months net interest income and income from financing activities advanced 41.7 percent to 2.05 billion riyals and net fees and commissions increased 38.7 percent to 779.70 million riyals, the bank said.

Net gains from dealing in foreign currencies grew 82.5 percent to 249.90 million riyals, it added.

Analysts' forecasts in a Reuters survey last month for the third-quarter profit ranged from 832.88 million riyals to 967.80 million riyals.

Fuelled by an almost four-fold rise in oil prices since 2002, lenders in the Gulf Arab region have being expanding overseas.

QNB has acquired a 50 percent stake in the Tunisian-Qatari bank and bought a 23.8 percent stake in the United Arab Emirates-based Commercial Bank International

It has a 33.2 percent stake in Jordan's Housing Bank for Trade and Finance .

The bank made 1.86 billion riyals in the first half of this year and 648.90 million riyals in the third-quarter of last year.

The bank's shares lost almost 18 percent this year.