Egypt's planning minister expects the economy to grow at a pace of less than five per cent in the first quarter of the 2015-2016 fiscal year but to accelerate in coming years, stimulated by new investments and mega projects.

Egypt revised its gross domestic product (GDP) growth target for the current fiscal year to 5.5 per cent from five per cent on Saturday and said its economy grew at 4.2 per cent in the 2014/2015 fiscal year, up from 2.2 per cent the previous year.

But the planning minister told Reuters on Tuesday that growth will speed up. "Average economic growth in the coming two years will be between 5.5 and six per cent," planning minister Ashraf Al Arabi said in an interview.

"With the injection of new investments, Gulf investment and financing packages, and new road projects, all of this will push us over the five per cent level," Al Arabi said, adding that the government will look to push the budget deficit below 10 per cent of GDP during this period.

Egypt's budget deficit dropped to 11.5 per cent of gross domestic product in fiscal 2014/2015 from 12.2 per cent during the previous fiscal year.

Egypt is implementing reforms aimed at reviving its economy after the 2011 uprising that ended Hosni Mubarak's 30-year rule and frightened off tourists and foreign investors, on which it relies for foreign currency earnings.

President Abdel Fattah Al Sisi has tied economic recovery to elaborate mega projects, including a new channel for the Suez Canal completed last August and a proposed capital with an airport larger than London's Heathrow.

Egypt also plans to reclaim vast tracts of desert, making the land suitable for agriculture and new homes.

Al Arabi said Egypt will establish a company with 8 billion Egyptian pounds ($1 billion) in capital by the end of December to lead the desert reclamation project.

"The project aims to reclaim 1.5 million feddans (1.6 million acres) for agriculture over three stages while creating an integrated urban community in these areas," said Al Arabi.

"This project will increase the living area in Egypt to nine per cent from seven per cent currently," said Al Arabi.

Projects so far have had little impact on the unemployment rate, which was 12.8 per cent in the third quarter of 2015, only slightly down from 13.1 per cent in the same period last year, the state statistics agency said in November. – Reuters