Egypt’s GDP growth rate records 4.3% in the second quarter of FY 2024/2025
Egypt’s GDP growth rate continued to recover during Q2 FY 2024/2025, recording 4.3%, up from 2.3% in the same quarter of the previous fiscal year. This growth is driven by continued structural reforms aimed at maintaining macroeconomic stability, coupled with stringent governance of public investment that strengthen resilience and support shifting from a non-tradable to a tradable economy amid global uncertainties
Key sectors driving expansion include non-oil manufacturing, tourism (reflected in restaurants and hotels), communication and information technology (ICT), and trade-related transportation and storage — despite continued declines in the Suez Canal due to ongoing geopolitical tensions
On the expenditure side, private investment exceeded public investment in Q2 FY2024/2025, for the second consecutive quarter, surpassing 50% of total investments, while public investment declined to below 40%, reflecting a continued shift in Egypt’s investment landscape
These results are supported by high-frequency indicators, which underscore a continued economic recovery, with the Purchasing Managers’ Index (PMI) signaling a gradual rebound in private sector activity. By early 2025, the PMI rose slightly above the neutral threshold – reaching its highest level in nearly four years – where it remained in expansion territory through February, reflecting sustained improvement in business confidence and economic activity
Key Highlights
Sectoral growth reflects positive performance in key tradable sectors, with non-oil manufacturing (17.7%), tourism (18%), and ICT (10.4%) among the fastest-growing during Q2 FY 2024/2025. This shift aligns with ongoing structural reforms aimed at enhancing productivity and export-driven growth. Other sectors, including financial intermediation, transportation and storage, electricity, wholesale and retail trade, agriculture, and construction, also recorded positive growth, reinforcing overall economic momentum
Non-oil manufacturing sector recorded positive growth for the third consecutive quarter, reaching 17.7% during Q2 FY 2024/2025, compared to a contraction of 11.5% during the same quarter in the previous year. This growth coincides with an increase in private investments, alongside higher merchandise exports, and a rebound in real domestic credit to the private sector—particularly in the industrial sector. The sector’s contribution to GDP growth has steadily improved, rising from -1.4 percentage points in Q2 FY 2023/24 to 1.9 points of the 4.3% overall growth this quarter
The Suez Canal remains the most affected by geopolitical tensions in the region, recording a contraction of 70% due to the decline in the number of vessels passing through the Canal, resulting in reduced revenues
The Extraction sector also continues to decline, though investment in new discoveries and field development is expected to gain traction in the coming period, supporting future production capacity and mitigating the sector’s downturn
On the expenditure side, net exports made a positive contribution of 1.75 percentage points for the first time since Q1 FY2023/2024, supported by higher goods and services exports, notably steady tourism growth
The Ministry of Planning, Economic Development, and International Cooperation announced the GDP growth rate for the second quarter of FY 2024/25 as part of its quarterly updates on the Arab Republic of Egypt’s economic performance. The real GDP growth rate 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
Dr. Rania Al-Mashat, Minister of Planning, Economic Development, and International Cooperation, 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 favorable 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. 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 emphasized 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 FY2024/2025. 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, 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
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