Cairo, Dec 31: Egypt’s economy expanded by 3.5% in the first quarter of the 2024/25 fiscal year, a notable improvement from 2.7% in the same period last year, the Ministry of Planning announced on Monday. This growth signals resilience amid ongoing geopolitical tensions and global economic uncertainty.
“The uptick in growth was driven by significant improvements in non-petroleum manufacturing, transportation, and tourism,” the ministry said in a statement, highlighting the country’s diversified recovery despite challenges in other sectors.
The non-petroleum manufacturing sector led the growth, recording a 7.1% increase in Q1. This was a strong turnaround from a 7.7% contraction in the same quarter last year. The industrial production index, excluding crude oil and petroleum refining, grew by 6%, driven by improved customs clearance processes and greater availability of production inputs.
The transportation and storage sector also performed robustly, posting a 15.6% growth, the highest among all sectors. The surge was attributed to ongoing infrastructure improvements and operational efficiencies, with rail freight activity jumping by 59% as passenger rail and metro services saw increased usage.
Tourism, a key driver of Egypt’s foreign exchange inflows, saw an 8.2% rise in Q1. The total number of tourist nights increased to 51.6 million, up from 47.7 million in the same period last year, boosted by global travel recovery and government measures to attract visitors.
However, not all sectors showed positive performance. The Suez Canal experienced a sharp contraction, with activity down 68.4% as geopolitical tensions led to a decline in the number of vessels passing through. Revenues from the vital waterway dropped from $2.6 billion to $970 million.
The extraction sector also struggled, contracting by 8.9%, with oil activity down 6.2% and natural gas production falling by 18.8%. Despite these setbacks, officials remain optimistic, expecting a rebound in the coming months due to new exploration projects and efforts to resolve outstanding dues to foreign oil and gas companies.
On a positive note, exports rose by 3.9%, totaling $10.46 billion, driven by strong performances in pharmaceuticals, perfumes, and ready-made garments. Pharmaceutical exports surged by 26.5%, reflecting the success of government initiatives to expand this sector.
The telecommunications and information technology sector grew by 12.2%, fueled by investments and rising demand for both fixed-line and mobile services.
The government has also made notable strides in attracting private investment, with contributions from the private sector rising significantly in Q1. High-frequency indicators, including the Business Barometer and the Purchasing Managers’ Index, suggest positive sentiment among businesses, particularly in production, sales, and export activity.
“The government’s economic policies have started yielding results,” the ministry said, forecasting that GDP growth will average 4% for the full fiscal year, peaking at 4.8% in Q4.
