Egypt's unemployment rate below 12 percent for first time since 2011 -CAPMAS

CAIRO, Aug 15 (Reuters) - Egypt’s unemployment rate dipped below 12 percent in the second quarter, the first time it has been that low since the political uprising of 2011.

Nearly 80 percent of those unemployed were young, however.

Official statistics agency CAPMAS said on Tuesday the rate dipped to 11.98 percent from 12 percent the previous quarter.

This was slightly higher than expected by government. Finance Minister Amr El Garhy told Reuters in May he expected the rate to reach 11.7-11.8 percent by the end of the fiscal year that ended June.

The unemployment rate in the second quarter of last year stood at 12.5 percent, down from 12.84 the same quarter a year earlier.

The country’s labour force grew by 33,000 people in the second quarter from the first quarter, reaching 29.2 million people, the agency said. That is less than a third of Egypt’s more than 93 million people.

The total number of unemployed during the quarter stood at 3.4 million people, the CAPMAS report said.

Egypt’s economic growth has deteriorated since the 2011 uprising that toppled long-time autocrat Hosni Mubarak drove tourists and foreign investors away, drying up foreign reserves.

President Abdel Fattah al-Sisi has pledged to reduce joblessness to 10 percent over the next few years, a target that will require higher levels of economic growth.

Egypt signed a $12 billion International Monetary Fund programme last year aimed at reviving the economy. It has since then floated the pound currency and imposed some harsh economic reforms, including subsidy cuts and tax hikes, as part of the three-year IMF deal.

Egyptians have seen their savings slashed by high and inflation rates skyrocket since November. Key inflation rates soared to multi-decade highs last week on the back of energy subsidy cuts agreed with the IMF.

Young people remain disproportionately impacted by the jobs shortage, with Monday’s data showing 79.6 percent of those unemployed aged between 15 and 29.

But some saw that as a longer-term positive.

“It’s a positive trend that unemployment is going down, especially because most of the unemployed are youth, and this means that we’re not too far from reaching a single-digit rate,” said Reham ElDesoki, an economist at Arqaam Capital.

Reporting by Arwa Gaballa; Additional reporting by Eric Knecht; Editing by Jeremy Gaunt