Egypt’s Ministry of Planning, Economic Development, and International Cooperation has forecasted a 4% growth rate for the country’s Gross Domestic Product (GDP) in fiscal year (FY) 2024/2025, a statement showed on December 31.
Q1 growth
In the first quarter of FY 2024/2025, Egypt’s economy grew by 3.5%, up from 2.7% in the same quarter last year. The ministry attributed the growth to government reforms stabilizing the macroeconomy and improving public investment governance.
These efforts boosted momentum in several sectors, especially transformative industries, despite a decline in Suez Canal revenues due to regional geopolitical challenges, the ministry noted.
In Egypt, the fiscal year is from July 1 to June 30.
Suez Canal revenues plummet
According to the ministry’s data, Suez Canal revenues plunged by 68.4% in the first quarter of FY 2024/2025, reflecting the broader geopolitical tensions that have disrupted regional trade flows. This decline highlights the challenges facing Egypt’s key maritime asset, the Suez Canal. However, the broader economic impact has been partially offset by growth in other sectors.
Transformative industries lead
Among the top performers, transformative industries saw a 7.1% growth in the first quarter of FY 2024/2025, driven by streamlined customs clearance procedures at key ports, which enhanced supply chain efficiency, added the statement. Such industries include furniture manufacturing, wood and paper production, as well as beverage production. Other sectors, including transport, storage, communications, tourism, retail, wholesale trade, agriculture, and construction, also posted positive growth.
Private sector activity
In addition to sectoral growth, other key indicators have shown signs of improvement. The Purchasing Manager’s Index (PMI), a leading indicator of economic health, rose to 49.2 in November, up from 49 in October. Although still below the 50-mark that signals expansion, the uptick suggests a steady recovery. Notably, the PMI exceeded 50 in August, pointing to a period of stronger economic momentum.
Private investment also experienced a strong rebound, growing by 30% to reach EGP 133.1 billion in the first quarter of FY 2024/2025, compared to EGP 102.3 billion in the same quarter of the previous year, added the ministry statement. In contrast, public investment saw a sharp decline of 60.5%, dropping to EGP 57 billion from EGP 144.4 billion during the same period in FY 2023/2024.
This significant drop in public investment aligns with the government’s decision in January to cut public investment expenditure by 15% for FY 2023/2024 as part of broader fiscal consolidation measures.
Despite challenges in key sectors such as the Suez Canal, Egypt’s economy appears to be on a positive trajectory, supported by government reforms and improvements in key industries, the ministry noted. However, the performance of public investments and broader geopolitical factors will remain critical to maintaining growth momentum throughout FY2024/2025.
World Bank forecasts
The World Bank’s latest report “Growth in the Middle East and North Africa” expected Egypt’s real GDP growth rate to recover to 3.5% in FY2025, following a decline from 3.8% in FY2023 to an anticipated 2.5% in FY2024.
