April 16, 2018 / 12:48 PM / 4 months ago

UPDATE 1-Egypt's jobless rate dips to 11.8 pct, private sector growth remains elusive

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CAIRO, April 16 (Reuters) - Egypt’s unemployment rate dipped to 11.8 percent in 2017 from 12.5 percent the year before, state statistics agency CAPMAS said on Monday, as the country looks to put people back to work after years of downturn.

Egypt is hoping to ramp up economic growth it needs to create jobs as it forges ahead with a three-year, $12 billion IMF loan programme signed in late 2016 and tied to tough austerity measures.

The government said it sees GDP growth at 5.8 percent in the coming fiscal year that begins in July, a jump from the 5.5 percent growth rate it expects to close the current fiscal year at.

President Abdel Fattah al-Sisi has said he will cut unemployment to 10 percent in coming years, a target that will require new investment.

Egypt has struggled to restore growth levels battered by political upheaval since its 2011 uprising. Those protests were partly driven by young Egyptians angered by lack of job prospects.

Monday’s CAPMAS figures indicated that 24.8 percent of youth between the ages of 15 and 29 were unemployed, with the figure rising to 31.8 percent among Egyptians with higher levels of education.

The official employment figures, however, only count a labour force of 29.5 million Egyptians, or less than a third of the country’s population of 96.8 million.

“In general, there are very clear improvements in the economy. The questions remain: how broad are these improvements and how many new jobs are being created?” said Angus Blair, chief operating officer of Pharos Holdings, an investment bank.

Egypt’s Purchasing Manager’s Index (PMI), a monthly measure of non-oil private sector activity and job growth, has meanwhile declined in each of the past 29 months except for one.

“The PMI Survey has reported that the private sector in Egypt has seen a contraction in non-oil employment for about two years, so the question is where is the rise in employment coming from?” said Blair. (Reporting by Eric Knecht Editing by Mark Heinrich)

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