World Economy

Egypt Deposits Grow

Egypt Deposits GrowEgypt Deposits Grow

Deposits in Egyptian banks grew by 20.2% this past July compared to the same period last year, according to a report issued by the Information and Decision Support Center (IDSC) affiliated with the cabinet.

The report stated that deposits reached nearly $203 billion in July compared to $169 billion for the same period in 2013, Daily News Egypt reported.

The rise in banking deposits reflects heightened confidence and growing savings rates according to Banking Finance Advisor at Baraka Bank Egypt Bassant Fahmy, who said that “the rise in deposits does not necessarily reflect a growing economy, but must be used in lending activities for various economic activities.”

Balances of credit facilities, whether governmental or non-governmental, increased by 6.8% in July 2014 compared to the same period a year ago.

Government credit facilities increased to $5.7 billion representing 12.4% growth compared to the same period last year, while facilities granted to the agriculture, industry, trade, and services sectors amounted to $50.9 billion with an annual growth rate of 4.8%.

According to Fahmy, government debt at present amounts to $251 billion, $279 billion with annual interest, which leads to serious issues for payment processes in addition to a crowding out of the private sector in obtaining loans for growth and expansion.

The Ministry of Planning stated in a report published last week that growth rates in manufacturing industries recorded 8.3% growth last year.

“The increase in private sector borrowing in recent times reflects stability as well as the private sector’s desire for growth. I expect that growth will range between 5-10% during the second half of the year for the private sector,” said Hossam Nasser, former chairman of the Industrial Development Bank.

On the subject of the increase in credit obtained by the government in July, Nasser believes that “the circumstances that Egypt’s economy has experienced are difficult, and all countries of the world resort to funding the budget deficit through bonds and treasury bills.”

Despite Nasser’s agreement with the state’s obtaining credit to fund the budget gap, he requested that the government not always rely on this as a solution.