Egypt's power choices appease public, squeeze industry

Far fewer Egyptians are complaining about the kind of power cuts that fuelled unrest in the past but government energy policies apparently focused on appeasing the public are dealing a blow to industries vital for economic growth.

Companies say production will continue suffering unless the government starts diverting some of the gas supplied to electricity plants powering homes to factories.

Research group Capital Economics estimates manufacturing output contracted by almost 30 percent year-on-year in June due to foreign exchange restrictions and gas shortages.

"Factories have been beset by power outages and (economic) activity has suffered," it said in a note.

Egypt's economy has slowed sharply in 2015, with growth falling from 4.3 percent at the end of last year, to as little as 2 percent year-on-year in recent months, Capital said.

The government's decision to keep power flowing to homes, especially during summer months when air conditioning units operate at full blast, is not surprising.