Egypt’s Q3 GDP rises 5% as Suez Canal, construction drive growth – minister

Egypt’s economy expanded by an estimated 5 per cent in the third quarter of fiscal year 2025/2026 (January–March), up from 4.8 per cent a year earlier, amidst a broad-based recovery in non-oil sectors, the planning minister said Wednesday.

During a Cabinet meeting, Planning and Economic Development Minister Ahmed Rostom said the preliminary figure exceeded earlier expectations of 4.6 per cent, which had reflected concerns over regional geopolitical tensions, supply chain disruptions, and higher oil prices.

Growth was led by non-petroleum activity, with the Suez Canal expanding 23.6 per cent, hotels and restaurants rising by 8.3 per cent, and construction increasing by 5.6 per cent during the quarter.

The Suez Canal posted its third consecutive quarter of growth as shipping activity continued to recover and navigation flows stabilised despite ongoing regional tensions, Rostom added.

Industrial activity excluding oil returned to growth of 2.1 per cent, supported by gains across manufacturing segments including wood products (+60 per cent), motor vehicles (+27 per cent), chemicals (+10 per cent), pharmaceuticals (+8 per cent), paper products (+4 per cent), and food industries (+4 per cent).

The construction sector rebounded from a prior contraction, supported by infrastructure and urban development activity as well as higher steel and cement demand.

Rostom said international forecasts remain positive for the sector, with Fitch projecting construction growth to reach 5.6 per cent in fiscal year 2026/2027 and 6.6 per cent in 2027/2028, driven by investment in energy projects, power grid upgrades, renewable energy expansion, and large-scale urban development.

He added that contraction in the extractive sector slowed, supported by increased drilling and exploration activity that lifted oil and gas output in recent months.

Government measures, including improved terms for foreign partners and repayment of arrears, helped reduce outstanding dues to about $700 million, down from $6.1 billion in June 2024, with full settlement targeted by the end of June, he added.

Recent oil and gas discoveries in March and April are also expected to support production and underpin growth in the final quarter of the fiscal year.

Attribution: Amwal Al Ghad English