Egypt’s economy grew by 5.3% in the first quarter of the 2025/2026 fiscal year, GDP growth exceeded 5% for the first time in more than three years, the Ministry of Planning, Economic Development, and International Cooperation said.
The GDP growth rate, up from 3.5% in the same period a year earlier, marks the strongest quarterly performance in over two years. The ministry attributed the acceleration to structural reforms that are bolstering the real economy and steering the growth model toward tradable, high-productivity sectors including manufacturing, tourism, and telecommunications.
Private investments grew by 25.9%, accounting for 66% of total executed investments—the highest level recorded compared with previous periods. Conversely, the share of public investment declined to 34%, reflecting a government strategy to rationalise spending and prioritise high-impact projects while empowering the private sector.
“This acceleration reflects the tangible impact of ongoing economic and structural reforms,” the ministry said in a statement.
Minister of Planning, Economic Development, and International Cooperation Rania Al-Mashat said the higher-than-expected growth reflects sustained momentum driven by non-oil manufacturing, tourism, and telecommunications.
“Macroeconomic stability enables structural reforms, while reforms reinforce stability, laying the foundation for sustainable growth,” Al-Mashat said, noting that preliminary indicators point to a positive outlook for the full fiscal year with projections of at least 5% GDP growth.
Sector Performance
Non-oil manufacturing activity expanded by 14.5% during the quarter, compared to 7.1% in the previous year. The ministry reported that industrial production increases were driven by a rise in demand rather than price fluctuations.
Specific industries recorded significant gains:
- Motor vehicles: 50%
- Chemical products: 44%
- Beverages: 37%
- Furniture: 34%
- Ready-made garments: 17%
Exports of semi-finished goods grew by 34.1% in August 2025, while fully finished exports rose by 2.4%.
The tourism sector grew by 13.8%, attracting nearly 5.1 million tourists during the quarter. The ministry cited improved infrastructure and marketing campaigns for the rise, noting that Egypt has topped the list of leading African tourist destinations for the third consecutive year.
Suez Canal activity recorded positive growth of 8.6%, the first increase since the second quarter of the 2023/2024 fiscal year. The waterway had experienced nearly 18 months of negative growth due to geopolitical tensions in the Red Sea.
The communications and information technology sector expanded by 14.5%, while financial intermediation grew by 10.2%.
Extractive Sector and Outlook
In contrast to the broader economic gains, the extraction sector contracted by 5.3%. Petroleum activity declined by 6.6% and natural gas by 10.9%. However, the ministry noted the pace of contraction has slowed compared to the 8.9% decline in the corresponding quarter of the previous year, supported by recent discoveries.
Since August, 75 new oil and gas discoveries were made and 383 new wells added to the production map, addingapproximately 1.1bn cubic feet of gas and 200,000 barrels of crude oil per day to production capacity.
Looking ahead, the ministry stated that a more stable regional environment is expected to further enhance confidence. Preliminary economic indicators suggest upside risks could lift growth beyond the projected 5% for the 2025/2026 fiscal year.
