July 3, 2018 / 11:43 AM / a year ago

UPDATE 2-Egypt's economy grew 5.4 pct in 12 months to June 30 - PM

(Adds details and context)

CAIRO, July 3 (Reuters) - Egypt’s gross domestic product grew by 5.4 percent in the 2017-2018 fiscal year that ended on June 30, new Prime Minister Mostafa Madbouly said on Tuesday, the fastest growth rate of growth in a decade.

In a televised address to parliament to present his administration’s four-year programme, Madbouly also vowed that his government would push ahead with a campaign against Islamist militants.

Madbouly, a former housing minister, was appointed prime minister last month after President Abdel Fatah al-Sisi was elected for a second term in March.

Parliament will discuss the government programme and is widely expected to approve it in the coming days.

Egypt has been implementing severe austerity measures as part of a 2016 IMF loan programme intended to shore up the country’s finances.

The reforms have involved a currency float, cutting subsidies and raising prices of fuel, electricity and public transport.

Analysts say the tough reforms, coupled with better security, have helped turn the economy around.

In his speech to parliament, Madbouly said his government was looking for growth of up to 8 percent in fiscal year 2021-22. GDP grew by 4.2 percent in the fiscal year 2016-2017.

Tourism, Suez Canal revenues and remittances from Egyptians working abroad have risen over the past year, boosting the economy of the most populous country in the Arab world.

Remittances surged to $19.37 billion in the nine months until end-March, from $15.89 billion a year earlier, according to central bank figures released on June 28.

Madbouly said annual unemployment at the end of June stood at 10.6 percent and that his government was seeking to bring it down to 8 percent by fiscal year 2021-22.

The growth figures show a recovery in an economy which slowed after a 2011 uprising drove tourists and foreign investors away, drying up foreign currency reserves.

The prime minister said Egypt’s total government debt would be no higher than 90 percent of GDP by June 2020.

As of December, external debt stood at 36.1 percent of GDP and its domestic public debt stood at 83.8 percent of GDP, data from the central bank shows.

Madbouly vowed to push ahead with a campaign against Islamist militants, mainly in Sinai, who have killed hundreds in recent years.

He also vowed to protect human rights, support popular participation in political life and enhance the role of political parties.

Critics say Sisi is presiding over an unprecedented crackdown on dissent. Supporters say such measures are needed to stabilise the country. (Reporting by Ahmed Tolba and Patrick Werr; Writing by Sami Aboudi and Nadine Awadalla; Editing by Jane Merriman and Andrew Roche)

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