File Photo: An Egyptian woman shops at a fruit market in Cairo. AFP
The ministry attributed this improvement to the ongoing structural reforms to maintain macroeconomic stability and the stringent governance of public investment. These have strengthened resilience and facilitated a shift from a non-tradable economy to a tradable one amid global uncertainties.
Egypt has engaged in an Extended Fund Facility (EFF) loan programme with the International Monetary Fund (IMF) to restore its key macroeconomic indices to their healthy levels.
Key sectors contributing to this expansion include the following:
- Non-oil Manufacturing: This sector recorded an impressive growth rate of 17.7 percent, marking a turnaround from an 11.5 percent contraction in the same quarter of FY2023/2024. The growth is attributed to increased private investments, higher merchandise exports, and a rebound in real domestic credit to the private sector, particularly in industrial activities.
- Tourism: The tourism sector grew by 18 percent, benefiting from an influx of 4.41 million tourists and a rise in tourist nights to 41.92 million during the quarter.
- Communication and Information Technology (ICT): This sector grew by 10.4 percent, driven by the expansion of digital infrastructure and increased demand for internet services.
Despite these sectors' positive performance, the Suez Canal faced significant challenges, recording a contraction of 70 percent due to geopolitical tensions affecting navigation and reducing the number of vessels transiting the canal, the statement read.
Moreover, private investment exceeded public investment for the second consecutive quarter, reaching over 50 percent of total investments, while public investment declined to below 40 percent.
This shift reflects a notable change in Egypt’s investment landscape, with private investment increasing by 35.4 percent compared to the same quarter of FY2023/2024.
High-frequency indicators support the positive economic outlook. The Purchasing Managers' Index (PMI) is slightly above the neutral threshold and has reached its highest level in nearly four years, signaling a gradual rebound in private sector activity.
Minister of Planning, Economic Development, and International Cooperation Rania Al-Mashat emphasized the importance of contractionary fiscal and monetary policies in achieving this growth.
She noted that structural reforms to diversify growth and enhance Egypt’s economic competitiveness have driven performance in key sectors.
Meanwhile, the extraction sector continued to face challenges, contracting by 9.2 percent due to declines in oil and natural gas production.
However, investments in new discoveries and field development are anticipated to support future production capacity.
Positive growth across various sectors reinforces the overall economic momentum, including financial intermediation (11.6 percent), transportation and storage (9.4 percent), and construction (4.8 percent).
The government reported that net exports contributed positively for the first time since Q1 of FY2023/2024, supported by higher exports of goods and services.
The ministry asserted its commitment to strengthening the national accounts system and improving the accuracy of economic indicators.
The growth outlook remains positive, underpinned by continuous structural reforms and a strategic focus on tradable sectors, essential for building a diversified and sustainable economy.
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