Egypt's economy grows 3.5% in Q1 FY2024/25

CAIRO – 31 December 2024: Egypt's economy demonstrated resilience in the face of global challenges, achieving 3.5% growth in the first quarter of the 2024/25 fiscal year, an improvement over the 2.7% recorded in the same period last year. This growth was driven by a diversified performance across key sectors, despite headwinds from geopolitical tensions and global economic uncertainty.

 

The non-petroleum manufacturing sector led the way with 7.1% growth, fueled by streamlined customs processes and improved access to production inputs. The industrial production index, excluding oil and petroleum refining, showed a strong 6% average growth, reversing the previous year's contraction. Government initiatives to bolster manufacturing capacity have played a crucial role in this sector's success.

 

The transportation and storage sector experienced the highest growth rate at 15.6%, driven by infrastructure improvements and operational efficiency. Increased passenger rail and metro usage, along with a significant surge in rail freight activity, highlighted the positive impact of long-term transportation investments.

 

The tourism sector rebounded with 8.2% growth, supported by a recovery in global travel and government efforts to attract visitors. Tourist nights increased to 51.6 million, contributing significantly to foreign exchange inflows.

 

The Suez Canal sector contracted by 68.4% due to a decline in vessel traffic amid heightened geopolitical tensions. Revenues plummeted to $970 million from $2.6 billion in the previous year.

 

The extraction sector contracted by 8.9%, with oil activity down 6.2% and natural gas production falling by 18.8%. However, officials anticipate a rebound with new exploration projects and efforts to resolve outstanding dues to foreign oil and gas companies.

 

Exports increased by 3.9% to $10.46 billion, driven by strong growth in pharmaceuticals, perfumes, and ready-made garments. Pharmaceutical exports surged by 26.5%.

 

The telecommunications sector maintained double-digit growth at 12.2%, driven by rising demand for fixed-line and mobile services and investments by telecommunications companies.

 

The government expects GDP growth to reach an average of 4% for the full fiscal year, with a peak of 4.8% in the fourth quarter. Efforts to attract private investment are gaining momentum, and high-frequency indicators suggest positive business sentiment, driven by gains in production, sales, and export activity.