This leap marks a significant acceleration from 3.5 percent recorded in the same period of the previous fiscal year, reflecting the deepening impact of structural and economic reforms, expanding private-sector participation, and stronger activity in high-productivity sectors.
The International Monetary Fund (IMF) is anticipated to initiate the discussions concerning the completion of the fifth and sixth reviews of the Extended Fund Facility (EFF) programme in early December, within which the current wave of economic and structural reforms is being executed.
Hereunder are key indicators for the 1Q (July-September 2025) of FY2025/2026.
Private investment drives growth
On the expenditure side, investment contributed 2.45 percentage points to total growth, signalling a renewed uptick in capital formation.
Private investment surged 25.9 percent, accounting for 66 percent of total executed investments, its largest share in years, while the share of public investment eased to 34 percent as the government continued to prioritize high-impact and value-adding projects.
This shift aligns with the state’s strategy to rationalize public spending, improve resource allocation, and expand the private sector’s role as a core engine of economic activity.
Manufacturing expands across multiple industries
The non-oil manufacturing sector remained the backbone of the economy, expanding 14.5 percent, double the pace of the previous year.
The sector’s performance reflects rising domestic and foreign demand, improved production capacity, and a more supportive industrial environment.
Industrial output was buoyed by double- and triple-digit growth across key industries, including the following:
* Motor vehicles: +50 percent
* Chemical products: +44 percent
* Beverages: +37 percent
* Furniture: +34 percent
* Pharmaceuticals and medicinal chemicals: +19 percent
* Ready-made garments: +17 percent
The sector also successfully converted production momentum into export gains. Semi-finished exports rose 34.1 percent in August 2025, while fully finished exports increased 2.4 percent.
Ready-made garments, a leading category, jumped 20.6 percent.
The ministry expected mobile phone assembly to surpass 10 million units in 2025, up from 3.3 million in 2024, reflecting the scale of new and expanded high-tech manufacturing investments.
Tourism and ICT continue strong growth
Tourism maintained its post-pandemic recovery, growing 13.8 percent, supported by improved services, infrastructure, and targeted promotion campaigns.
Egypt welcomed nearly 5.1 million tourists during the quarter.
Digital transformation initiatives at the Ministry of Tourism and Antiquities, including AI-assisted visitor services, further strengthened sectoral performance.
Egypt also continued to lead the African continent in the Nation Brand Performance Index 2024/2025, published by the World Economic Forum’s consulting arm, Bloom.
Globally, Egypt advanced six ranks to join the world’s top 25 destinations for tourism.
Expectations for the coming quarters remain positive, especially with the opening of the Grand Egyptian Museum, projected to attract five million visitors annually.
Meanwhile, the ICT sector grew 14.5 percent, supported by the state’s strategy to transform it into a productive, technology-based export sector anchored in outsourcing and digital services.
Suez Canal returns to growth as Red Sea stabilizes
For the first time since 2Q of FY2023/2024, Suez Canal activity posted positive growth, rising 8.6 percent as relative stability returned to the Red Sea region.
The waterway had recorded nearly 18 months of negative growth due to geopolitical tensions that disrupted shipping routes and reduced traffic.
Extractive industries contract, but at slower pace
Extraction activities declined 5.3 percent during the quarter, driven by contractions in oil output, which declined by 6.6 percent, along with the contraction of natural gas activities by 10.9 percent.
However, the rate of contraction slowed considerably from the 8.85 percent recorded in 1Q of the previous fiscal year.
The ministry attributed the improvement to recent gas field discoveries and intensified drilling, with 75 new oil and gas discoveries since August, 383 new wells added to production, an additional 1.1 billion cubic feet of gas per day, and an extra 200,000 barrels of crude per day.
These developments saved an estimated $6.7 billion in import costs and helped narrow the production-consumption gap.
External sector shows gradual improvement
Despite remaining negative, the contribution of net exports improved to -1.78 percent, compared with -3.25 percent a year earlier.
Exports of goods and services grew 1.3 percent, while imports increased 9.4 percent, driven mainly by intermediate goods essential for production.
Outlook: Growth projected at no less than 5% for FY25/26
Preliminary indicators point to a positive outlook for the fiscal year, with growth projected at no less than five percent and potential for even stronger performance.
The ministry said the forecast is underpinned by continued macroeconomic stability, structural reforms aimed at strengthening the real economy, rising private-sector-led investment, and a more stable regional environment supported by diplomatic efforts.
Minister of Planning, Economic Development, and International Cooperation Rania Al-Mashat said the robust outturn exceeds earlier expectations and underscores the “consistent strengthening of Egypt’s growth momentum,” driven by non-oil manufacturing, tourism, and telecommunications.
She noted that the growth pattern reflects an economic model increasingly oriented toward tradable, technology-enabled, and higher-productivity activities, building on Egypt’s upgraded infrastructure and ongoing reforms outlined in “Egypt’s Narrative for Economic Development: Reforms for Growth, Jobs and Resilience.”
“Macroeconomic stability enables structural reforms, while reforms reinforce stability, laying the foundation for sustainable growth,” Minister Al-Mashat stated.
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