Growth in the first quarter was driven by improvements in manufacturing activities and the government’s commitment to measures that enhance macroeconomic stability and encourage private sector investments

Commitment to the economic and structural reform program has contributed to the positive shift in the international institutions' outlook on Egypt's economy

H.E. Dr. Rania Al-Mashat, Minister of Planning, Economic Development, and International Cooperation, delivered an in-depth presentation on the latest developments in the global economy, their local repercussions, and the encouraging signs of improvement in Egypt’s economic indicators. This took place during her discussion on the actual implementation of the economic and social development plan for the fiscal year 2023/2024 with the Planning and Budget Committee of the House of Representatives, chaired by Dr. Fakhry El-Feki. The meeting was attended by several senior members of the committee, experts, and stakeholders, who engaged in a thorough dialogue on the ongoing challenges and prospects for Egypt’s economic development.

During the session, H.E. Dr. Rania Al-Mashat highlighted the Ministry’s commitment to maintaining ongoing cooperation and full coordination with the House of Representatives and all relevant parliamentary committees. The focus remains on ensuring the alignment of the country’s development strategies with its legislative framework and the priorities set by the state. This participatory approach is central to the government’s efforts in formulating development plans that address the economic, social, and environmental needs of the country. The Ministry aims to foster a competitive, private-sector-led economy, with an emphasis on creating sustainable jobs, boosting economic resilience, and achieving balanced regional development across Egypt.

H.E. Dr. Al-Mashat underscored that the government’s approach in planning and implementing its economic policies is grounded in a holistic view of development, which seeks not only to address immediate challenges but also to lay the foundations for long-term growth. This approach is centered on the implementation of policies that facilitate sustainable economic growth, ensure macroeconomic stability, and enhance Egypt’s competitiveness in the global market. The development plans are designed to meet the overarching national goal of building an inclusive, knowledge-based economy that capitalizes on Egypt’s strategic location and diverse resources.

Regarding the key developments in the global economy and their local impact, H.E. Dr. Al-Mashat provided a detailed overview of the current economic landscape. She noted that the global economy has faced a series of disruptive challenges in recent years, which have contributed to an atmosphere of heightened uncertainty. These challenges, including trade disruptions, geopolitical tensions, and the ongoing impact of the COVID-19 pandemic, have strained global growth prospects and raised concerns about future economic stability.

H.E. Dr. Al-Mashat pointed out that Egypt, like many other nations, has been affected by these global disruptions. The economic fallout from these challenges has slowed global growth rates, which in turn had an impact on Egypt’s economic performance in the past fiscal year. The restrictions on trade, investment, and technological cooperation, along with labor mobility restrictions, have all contributed to a slowdown in global economic activity.

However, despite these setbacks, H.E. Dr. Al-Mashat highlighted the positive momentum that has been building in Egypt’s economy over the past few months. The early signs of recovery in key economic indicators, particularly in the manufacturing sector, have been encouraging. She noted that these positive developments are largely due to the government’s implementation of bold and comprehensive economic reforms aimed at stabilizing the macroeconomic environment, enhancing governance, and stimulating the private sector.

The government’s commitment to reform has been a key factor in the recovery process. H.E. Dr. Al-Mashat pointed out that the government’s efforts to ensure macroeconomic stability have been complemented by policies aimed at fostering investment, improving the business climate, and supporting the growth of strategic sectors such as manufacturing, agriculture, and renewable energy. As a result, Egypt has seen a resurgence in manufacturing activity, which has been a major driver of growth in the first quarter of the current fiscal year.

The minister expressed confidence that the positive growth trend would continue in the coming quarters, supported by the government's continued efforts to implement policies that promote private sector growth and macroeconomic stability. She stressed that the government’s focus would remain on ensuring that the economy remains resilient in the face of both internal and external challenges. This includes measures to encourage foreign direct investment, enhance infrastructure, and improve the regulatory environment, all of which are crucial to maintaining the growth momentum.

H.E. Dr. Al-Mashat also shared the optimistic view that Egypt’s economy is well-positioned to weather future challenges. The country’s economic diversification and the continued development of key sectors such as manufacturing, energy, and technology have reinforced its resilience in the face of global volatility. She highlighted that the international community has recognized these efforts, with international credit rating agencies such as Fitch and Standard & Poor’s acknowledging the progress Egypt has made in stabilizing its economy.

On November 1, 2024, Fitch Ratings upgraded Egypt’s credit rating from B- with a positive outlook to B with a stable outlook, while Standard & Poor’s maintained Egypt’s rating at B-/B with a positive outlook. These upgrades are a direct result of the country’s successful reform efforts, particularly in areas such as exchange rate flexibility, monetary policy, and foreign exchange reserves.

H.E. Dr. Al-Mashat also referred to the ongoing decline in inflation rates as a positive indicator of the success of the government’s policies. Inflation, which had been a significant concern in recent years, has been steadily decreasing. The core inflation rate has shown a notable decline in the past few months, with a consistent downward trend through November 2024. This is in line with the reduction in monthly inflation rates for key goods, particularly in the second half of 2024, compared to the first quarter.

Projections for the future also suggest a further decline in inflation, with expectations that inflation rates will decrease significantly by February 2025. This reduction is anticipated to be driven by base-year effects, as well as a global downturn in commodity prices. These factors, combined with the government’s continued efforts to control prices and stabilize the market, are expected to contribute to a more favorable economic environment for businesses and consumers alike.

H.E. Dr. Al-Mashat emphasized that, despite the global uncertainties, Egypt’s economy has demonstrated remarkable resilience. The government remains committed to implementing the necessary reforms and policies that will support continued growth and stability. Efforts to boost foreign direct investment, improve the business climate, and support key economic sectors will remain a priority. The government’s proactive approach to addressing inflation, stabilizing the currency, and controlling prices is expected to yield continued positive results in the coming months.

H.E. Dr. Al-Mashat concluded by reiterating the Ministry’s commitment to working closely with all stakeholders, including the House of Representatives and other relevant bodies, to ensure the successful implementation of Egypt’s economic and social development plans. The Ministry remains dedicated to ensuring that Egypt’s economic recovery continues on track and that the country remains on a path toward sustainable, inclusive growth in the coming years.