Egypt Projects 5.4% Economic Growth Next Fiscal Year, Driven by Five Key Sectors

Egypt’s economy is expected to grow by 5.4% by the end of the next fiscal year, supported by strong performance across several key sectors that together account for nearly two-thirds of overall growth, according to projections presented by the Ministry of Planning and Economic Development.

Ahmed Rustom outlined the outlook during a meeting with the Economic Committee of the Egyptian Parliament on Sunday, where he reviewed the government’s development strategy and the expected impact of ongoing geopolitical tensions on growth, inflation, and prices.

He said the global economy continues to face significant disruptions, including supply chain instability, slowing trade, and rising energy and food costs, warning that many international institutions now anticipate stagflationary pressures and weaker global growth. He added that around 78 countries worldwide have already introduced measures to mitigate the effects of the crisis.

Despite these headwinds, Rustom noted that Egypt’s economy has shown resilience, growing by 4.4% in the 2024/2025 fiscal year, up from 2.4% the previous year. He said momentum continued into the first half of the current fiscal year, supported by ongoing reform efforts and government monitoring of regional risks.

Looking ahead, he stressed that geopolitical instability is affecting Egypt primarily through higher energy costs and increased production expenses, which in turn are contributing to inflationary pressures. However, he pointed out that international institutions continue to expect positive, though slightly moderated, growth, while credit rating agencies have maintained Egypt’s outlook at stable to positive, reflecting confidence in ongoing reforms.

The minister also highlighted both challenges and opportunities arising from the current environment, including the potential to attract regional investment, expand import substitution industries, boost agricultural and food exports, and strengthen tourism. He said the government is actively pursuing these opportunities through structural reforms and targeted incentives.

Rustom explained that the government has implemented measures to manage the impact of regional tensions, including tighter control of public spending and improvements in investment planning and governance. He also pointed to new development programs aimed at supporting entrepreneurship, small businesses, and productive clusters, alongside greater private sector participation in infrastructure projects.

He said the ministry’s strategy focuses on improving living standards, enhancing public services, strengthening productive sectors such as energy and food security, expanding healthcare coverage, and accelerating major national initiatives such as the “Decent Life” rural development program.

According to the projections, five sectors will contribute around 64% of Egypt’s economic growth in the 2026/2027 fiscal year. Manufacturing is expected to lead with a 29% contribution, followed by wholesale and retail trade at 11.3%, tourism at 9.3%, construction at 7.2%, and agriculture at 7%.

The government also expects nominal GDP to reach 24.5 trillion Egyptian pounds next fiscal year, up from an estimated 21.2 trillion pounds this year. Investment is projected at 3.7 trillion pounds, with private investment accounting for 59%, reflecting what officials described as growing confidence in the private sector’s role in economic activity.

Rustom concluded that despite persistent global uncertainty, Egypt’s economic planning framework is focused on balancing stability with growth, ensuring that investment priorities translate into tangible improvements in citizens’ quality of life.