Egypt’s real GDP growth rate in the second quarter of FY 2024/25 recorded 4.3%, up from 2.3% in the same quarter of the previous year, as a result of the government’s policies aimed at restoring macroeconomic stability, coupled with enhanced governance of public investment, the Ministry of Planning, Economic Development, and International Co-operation announced as part of its quarterly updates on the national economic performance.
Dr Rania Al-Mashat, Minister of Planning, Economic Development, and International Co-operation, highlighted the continued recovery of GDP growth in Q2 of the current fiscal year, driven by contractionary fiscal and monetary policies, as well as the stringent governance of public investment to maintain macroeconomic stability and a favourable business environment.
Structural reforms aimed at diversifying growth and enhancing Egypt’s economic competitiveness have driven strong performance in key sectors such as manufacturing, tourism, and telecommunications, according to her. She noted that the government is accelerating its shift toward tradable sectors like manufacturing to build a more diversified and sustainable economy, strengthening Egypt’s resilience to global economic challenges.
The Minister also emphasied the private sector’s growing role in development, with private investment rising by 35.4% in Q2, surpassing public investment for the second consecutive quarter. This reflects the success of government policies aimed at enhancing private sector participation and attracting local and foreign investment, despite ongoing geopolitical tensions, global economic challenges and contractions in some key sectors such as the Suez Canal and extractive industries.
The non-oil manufacturing sector recorded positive growth for the third consecutive quarter, reaching 17.7%. This recovery marks a sharp turnaround from the 11.56% contraction in the same period last year, and was supported by streamlined customs clearance for raw materials and industrial inputs, leading to increased industrial production. This recovery was driven by the growth of the Industrial Production Index (excluding crude oil and petroleum refining), which recorded an average growth of 17.7% during Q2 FY 2024/2025. Key industries driving this growth included motor vehicles (73.4%), ready-made garments (61.4%), beverages (58.9%), and textiles (35.3%).
Several economic sectors continued to achieve positive growth rates during the second quarter. The tourism sector (reflected in restaurants and hotels) grew by 18%, driven by an increase in the number of tourists to 4.41 million during the second quarter of the fiscal year, as well as a rise in tourist nights to 41.92 million nights during the same quarter. Additionally, the communication and information technology sector grew by 10.4%, driven by the expansion of digital infrastructure and increased demand for internet services.
Similarly, financial intermediation, transportation and storage, construction, social services (including health and education), insurance, and electricity activities achieved high positive growth rates of 11.6%, 9.4%, 4.8%, 4.6%, 4.6%, and 3.9% respectively. This reflects the diversification of Egypt’s economic growth drivers, aligning with the country’s vision for structural economic diversification and fostering development across all sectors.
On the other hand, Suez Canal sector continued to decline during the second quarter of the fiscal year 2024/2025, contracting by 70% due to ongoing geopolitical tensions in the region, which negatively impacted navigation through the canal, leading to a decline in the number of transiting ships.
Similarly, the extraction sector continued to contract, recording a 9.2% decline due to a slowdown in the oil and natural gas sub-sectors. Oil production decreased by 7.5%, while natural gas contracted by 19.6%. However, investment in new discoveries and field development is expected to gain traction in the coming period.
On the expenditure side, Egypt’s net exports made a positive contribution of 1.75 percentage points for the first time since Q1 FY2023/2024, supported by increased exports of goods and services. Government expenditure contributed around 0.14 percentage points to overall growth. Meanwhile, total investment contributed approximately 0.11 percentage points, influenced by a stringent governance of public investments to create space for private sector investments to drive long-term growth.
In that context, investment data reveals that private investment increased by 35.4% in Q2 FY2024/2025 compared to the same quarter in previous year, accounting for more than half of total investments. Public investment, on the other hand, contracted by 25.7%, making up less than 40%. This shift highlights notable changes in Egypt’s investment landscape.
It is worth noting that the Ministry released private investment data for the first time since 2020 last December, following a series revision based on an updated methodology, as part of the government’s commitment to strengthening the national accounts system and enhancing the accuracy of economic indicators.
The growth outlook remains positive, underpinned by continuous structural reforms that help maintain macroeconomic stability, as well as a strategic shift from a non-tradable to a tradable economy, strengthening resilience amid global uncertainties. Private investments are expected to play a key role in sustaining this momentum, fostering a conducive environment for long-term growth.
