(Corrects Jan. 28 story, changing dollars to Egyptian pounds in
bullet point and para 5)
* Stimulus package should be worth around 30 bln EGP
* Economy grew just 1 pct in Q1 of this fiscal year
* Govt aims to reassure that Egypt safe for investors
CAIRO, Jan 28 Egypt will announce details of its
second stimulus package since Islamist President Mohamed Mursi
was ousted in July within days, its finance minister said on
Tuesday, aiming to boost tepid growth and reassure investors.
Egypt's economy has continued to suffer from investment
outflows and a drop in tourism during political turmoil since
autocrat President Hosni Mubarak was toppled in an uprising in
2011. The economy grew by just 1.04 percent in the three months
through last September from a year earlier, according to latest
central bank data.
In the latest sign of turmoil, a senior Egyptian Interior
Ministry official was killed outside his home in Cairo on
Tuesday, putting pressure on the military-backed government as
it struggles to contain an Islamist insurgency.
The interim government is trying to give out assurances that
the country is safe for investors.
Bolstered by a pledge of more than $12 billion in aid from
Gulf countries since Mursi was ousted, the government introduced
a 30 billion Egyptian pound ($4.3 billion) stimulus package in
2013 and said it would follow up with a second package, also of
around 30 billion pounds, this month.
Finance Minister Ahmed Galal previously said that 20 billion
pounds of the new stimulus package would be spent on public
investment. The rest would be used to cover a public sector
minimum wage being introduced.
"It is ready, we just have a part missing with the oil
ministry, ... and we'll announce it within days," Galal told
reporters at an investment conference on Tuesday.
Army chief Field Marshal Abdel Fattah al-Sisi, who deposed
Mursi after mass protests against his rule, could also announce
within days that he will run for the presidency, a vote he is
almost sure to win.
Khalil Ibrahim, managing director in asset management at EFG
Hermes, said the killing of the Interior Ministry official could
"They get assurances and this puts them back," he said.
Galal said the government aimed to launch the second
stimulus package without increasing the budget deficit, which
stood at around 14 percent of gross domestic product in June,
the end of the last fiscal year. The government aims to bring
the deficit down to 10 percent of GDP by next June.
Galal said the deficit would shrink to 8 percent of GDP
within the next two to three years.
Speaking at the same conference, Investment Minister Osama
Saleh said that Egypt expects to beat its target of attracting
$4 billion in foreign direct investment (FDI) in the year ending
in June 2014, but did not say by how much.
FDI totalled $3 billion in the year ending June 2013, almost
$1 billion less than in the previous year.
Before the 2011 revolution, Egypt was attracting net
foreign direct investment of around $8 billion annually,
according to central bank data.
George Kazakos, a partner in Levant Partners, a Greece-based
asset management firm, said political turmoil was still a
problem for foreign investors.
"There are opportunities in Egypt but only under
conditions," he said on the sidelines of the conference.
"I will wait. You have to see the political situation start
to settle in order to see foreign investment."
(Reporting by Asma Alsharif, writing by Shadia Nasralla;
Editing by Alison Williams and Susan Fenton)