MARKET TALK:Egypt Short-Term Outlook Brims With New Challenges-Beltone

Thursday, Oct 13, 2011

0919 GMT [Zawya Dow Jones]--Egypt's short-term outlook is fraught with new challenges--ranging from lack of investments needed to boost a weakened GDP growth rate and increasing unemployment, to a widening fiscal deficit amidst increasing costs of financing debt, says Beltone Financial. Notes these numerous challenges, which Egypt has faced in the past nine months since Jan. revolution, will persist into the short-term, and are further exacerbated by pressures emanating from a faltering global economic recovery. "While the interim government focuses on short-term challenges, the adoption of long-term economic policies are being postponed to a future elected government, deferring a full rebound in economic growth." Says however policy options are available to address these challenges if coordination amongst different government entities is enhanced and the political will is present. Forecasts a modest GDP growth of 2% in FY 2011/12 and 3.1% in FY2012/13 for Egypt. (nikhil.lohade@dowjones.com)

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13-10-11 0919GMT