Egypt’s economic growth is expected to continue its upward trend in the second quarter of the current fiscal year, according to initial indicators, the Minister of Planning and Economic Development and International Cooperation, Rania Al-Mashat, said on Wednesday.
Speaking at the annual Iftar of the American Chamber of Commerce in Cairo, Al-Mashat outlined the developments in the Egyptian economy and its future prospects. She emphasised that improving Egypt’s economic future requires a collaborative effort from the government, private sector, civil society, and chambers of commerce.
Al-Mashat highlighted that planning and international cooperation involve two main funding streams: public budget financing and international partnerships. Both serve as tools for driving economic development, with macroeconomic stability and ongoing structural reforms as key pillars.
The Minister explained that funding is no longer solely about financial flows for projects but also encompasses public policies, inter-agency coordination, and resource mobilisation. She noted that economic development includes human development, industrial development, job creation, SME growth, and private investment.
Al-Mashat also said that Egypt aims for qualitative growth – sustainable growth based on long-term investments, a green economy, entrepreneurship, technology, and digital transformation.
Regarding Egypt’s competitive advantages, Al-Mashat highlighted its diverse economy, strong industrial base, and skilled workforce. She also pointed to the surge in entrepreneurship, particularly in the digital economy, fintech, e-commerce, and digital services.
Al-Mashat outlined Egypt’s economic model as a shift from a non-tradable economy to one based on trade and exports, focusing on industrial production for foreign markets. She said this would enhance value-added, improve production efficiency, and create skilled jobs, thereby improving overall productivity. She added that Egypt aims to consolidate its position as a regional green energy hub and strengthen its role in agriculture and trade, capitalising on its ports and strategic location to become a regional trade hub.
She said that average growth in 2023-2024 was 2.4%, rising to 3.5% in the first quarter, with further improvement expected. She also noted that the Purchasing Managers’ Index (PMI) had exceeded 50 points, reflecting an improvement in output. She highlighted that non-petroleum manufacturing is contributing significantly to growth, with two consecutive quarters of strong growth indicating improved value-added, higher exports, and a stronger industrial base. The ICT sector is also experiencing substantial growth, particularly in outsourcing services, with Egypt ranking third globally in the Global Services Location Index.
Al-Mashat stated that the Ministry is implementing a ceiling on public investments to control spending and direct resources to priority sectors. This has resulted in a notable shift in the share of private investment in GDP, accounting for 63% of total investments in the first quarter. She added that reduced public spending has created space for the private sector to lead development efforts, with increased domestic credit to the private sector from banks signalling growing confidence.
The Minister also noted improvements in Egypt’s external economic position and increased foreign direct investment in both petroleum and non-petroleum sectors, boosting foreign exchange reserves and stabilising exchange rates. She attributed this to monetary and fiscal reforms implemented in March last year, which restored confidence and facilitated companies’ access to foreign currency for production inputs. Tourism revenues are also on a positive trend, although Suez Canal revenues have been significantly affected by global developments.
Regarding financial indicators, Al-Mashat said that the budget showed a primary surplus and a decline in the overall deficit. Inflation has also begun to fall, reaching 12.8%, with core inflation at 10%, reflecting a trend towards price stability, which is essential for attracting investment and achieving sustainable growth.
She concluded that structural reforms, classified under promoting financial stability, enhancing economic competitiveness, and supporting economic diversification and the green economy, are key to long-term sustainable economic change.
