The Ministry of Planning, Economic Development, and International Cooperation released this statement on Tuesday.

The ministry attributed this improvement to strong performance in key sectors, particularly non-petroleum manufacturing. This sector saw positive growth for the second consecutive quarter, recording a 7.1 percent growth rate in Q1 of FY2024/2025 compared to the same period in FY2023/2024. 

Moreover, the ministry clarified that implementing economic reform policies since March 2024 to restore macroeconomic stability and strengthen the governance of public investments also contributed to the GDP growth recovery.

Other key sectors continued to show positive growth in Q1, including communications and information technology (12.2 percent), tourism (8.22 percent) (reflected in restaurants and hotels), electricity (7.42 percent), transportation and storage (15.6 percent), and social services including health and education (4.52 percent) and agriculture (2.652 percent).

These results are further supported by high-frequency data, highlighting positive trends in Egypt's economic activity.

The Industrial Production Index (excluding oil refining) showed a six percent growth on average during Q1 of FY2024/2025, a notable recovery from the 7.7 percent contraction in Q1 of FY2023/2024, read the statement.

Likewise, the statement emphasized that the Purchasing Managers' Index (PMI) demonstrated improvement, particularly in the new export orders sub-index, indicating a consistent rise in foreign new order inflows for seven months.

Furthermore, the ministry asserted that the Business Barometer Index, published by the Egyptian Centre for Economic Studies, increased to 51 points. Due to improvements in production, sales, exports, and capacity utilization, it surpassed the neutral level.

This performance is attributed to several targeted measures, such as streamlined customs clearance processes at ports, increased supply of essential production inputs, and accelerated industrial production.

These initiatives are further reflected in the ongoing improvement seen in the monthly Industrial Production Index.

Egypt achieved this growth despite a 68.4 percent contraction in Suez Canal activity during Q1 of FY2024/2025, driven by a decline in the number of vessels passing through. Regional geopolitical tensions have decreased its revenues.

Additionally, the extraction sector saw an 8.9 percent decline.

However, gas and oil production is expected to improve in the coming months, supported by the government’s efforts to settle outstanding dues to foreign oil and gas companies.

The ministry projected the GDP growth to reach four percent in FY2024/2025.

Meanwhile, the American agency Fitch Solutions forecasted in its December Egypt Country Risk Report that the country’s real GDP growth for FY2024/2025, which ends in June 2025, will reach 3.7 percent.

In its October Growth in the Middle East and North Africa report, the World Bank forecasted that Egypt's real GDP growth rate would reach 3.5 percent in FY2024/2025.

In addition, the International Monetary Fund (IMF) forecasted the real GDP to reach 4.1 percent in FY2024/2025.