Foreign direct investment falls by 75%

Foreign direct investment fell by 75.1 percent in the first quarter of 2011 compared to the last quarter of 2010, the Egyptian Central Bank announced on Wednesday. It also said that foreign and domestic debts rose considerably during the same period.

According to the bank’s July report issued on Wednesday, direct foreign investment stood at US$163.6 million during that period, compared to US$656 million in the last quarter of 2010, a drop of 90.4 percent.

Foreign debt went up by US$1.1 billion, or 3.4 percent, reaching US$34.8 billion due to the dollar's weakening against other currencies.

Foreign debt servicing also went up by US$137.8 million, reaching US$2.4 billion in the period from June 2010 to March 2011, while the total domestic debt reached LE1 trillion at end of March, of which 77 percent is held by the government, 6.8 percent by public economic institutions and 15.5 percent by the National Investment Bank.

Economics expert Ahmed Adam attributed the rise in domestic debt to a state budget deficit of LE140 billion. He predicted the debt would reach LE1.25 trillion, which amounts to 100 percent of GDP, by the end the fiscal year.

Translated from the Arabic Edition

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