Egypt’s economic growth is anticipated to maintain its upward trajectory in the second quarter of the current fiscal year, according to preliminary indicators, stated Rania Al-Mashat, minister of Planning and Economic Development and International Cooperation.
Speaking at the annual Iftar of the American Chamber of Commerce in Cairo, Al-Mashat discussed the advancements in Egypt’s economy and its future possibilities. She underscored that enhancing Egypt’s economic future necessitates a cooperative effort from the government, private sector, civil society, and chambers of commerce.
Al-Mashat emphasized that planning and international cooperation involve two primary funding streams: public budget financing and international partnerships. Both play crucial roles in promoting economic development, underpinned by macroeconomic stability and ongoing structural reforms.
The Minister articulated that funding is no longer limited to financial flows for projects; it also includes public policies, inter-agency coordination, and resource mobilization. She remarked that economic development spans human development, industrial advancement, job creation, SME growth, and private investment.
Egypt aims for qualitative growth and sustainability
Al-Mashat also highlighted that Egypt is striving for qualitative growth—sustainable growth rooted in long-term investments, a green economy, entrepreneurship, technology, and digital transformation.
Focusing on Egypt’s competitive advantages, Al-Mashat pointed out its diverse economy, robust industrial base, and skilled workforce. She also noted the increase in entrepreneurship, especially in the digital economy, fintech, e-commerce, and digital services.
Shift towards a trade-based economic model
Al-Mashat described Egypt’s economic model as transitioning from a non-tradable economy to one centered on trade and exports, emphasizing industrial production for foreign markets. She stated that this shift would enhance value-added, increase production efficiency, and generate skilled jobs, thereby boosting overall productivity. Furthermore, she added that Egypt aspires to solidify its status as a regional green energy hub and enhance its role in agriculture and trade, taking advantage of its ports and strategic location to become a regional trade hub.
Expected growth rates and economic indicators
Furthermore, Al-Mashat mentioned that average growth for 2023-2024 was projected at 2.4 percent, rising to 3.5 percent in the first quarter, with further improvements anticipated. She also observed that the Purchasing Managers’ Index (PMI) had surpassed 50 points, indicating an uptick in output. She highlighted that non-petroleum manufacturing is playing a significant role in growth, with two consecutive quarters of robust performance suggesting improved value-added, higher exports, and a more resilient industrial base. The ICT sector is also witnessing considerable growth, particularly in outsourcing services, with Egypt ranking third globally in the Global Services Location Index.
Shifts in public and private investment dynamics
Al-Mashat indicated that the Ministry is implementing a cap on public investments to regulate spending and allocate resources to priority sectors. This has led to a significant change in the share of private investment in GDP, which accounted for 63 percent of total investments in the first quarter. She added that reduced public spending has created opportunities for the private sector to take the lead in development efforts, with increased domestic credit to the private sector from banks signaling growing confidence.
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Improvements in Egypt’s external economic position
The Minister also acknowledged enhancements in Egypt’s external economic position and a rise in foreign direct investment in both petroleum and non-petroleum sectors, driving foreign exchange reserves and stabilizing exchange rates. She credited this to monetary and fiscal reforms enacted in March of the previous year, which restored confidence and facilitated companies’ access to foreign currency for production inputs. Tourism revenues are also trending positively, although Suez Canal revenues have been considerably impacted by global developments.
Structural reforms as a pathway to sustainable change
Concerning financial indicators, Al-Mashat stated that the budget revealed a primary surplus and a reduction in the overall deficit. Inflation has started to decline, reaching 12.8 percent, with core inflation at 10 percent, reflecting a trend toward price stability—an essential factor for attracting investment and achieving sustainable growth.
She concluded that structural reforms, categorized under promoting financial stability, enhancing economic competitiveness, and supporting economic diversification and the green economy, are vital for long-term sustainable economic transformation.
