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Arab Finance: Egypt’s economy grew to 5.3% in the second quarter (Q2) of fiscal year (FY) 2025/2026, marking its highest growth since Q3 FY2021/2022, Minister of Planning and Economic Development Ahmed Rostom revealed.
During a cabinet meeting chaired by Prime Minister Mostafa Madbouly, Rostom added that the economic growth is expected to reach 5.2% by the end of the current FY, up 0.7 percentage points from the government’s target of 4.5% for the FY.
The stronger growth was reflected in labor market indicators, with the employment rate among women rising to 21.7% in Q2 FY 2025/2026 from 18.5% in the same period a FY earlier. Meanwhile, male employment edged down slightly to 70.8% from 71.3%.
In the same vein, Rostom said that the unemployment rate fell to 6.2% in the second quarter of the FY.
He attributed the expansion to continued implementation of structural, fiscal, and monetary reforms that have strengthened macroeconomic stability and improved the economy’s resilience to domestic and external challenges.
Several labor-intensive sectors posted robust growth in the quarter, including the Suez Canal at 24.2%, restaurants and hotels at 14.6%, non-oil manufacturing at 9.6%, wholesale and retail trade at 7.1%, transport and storage at 6.4%, electricity at 5.6%, health services at 4.6%, and education at 3.3%.
Non-oil manufacturing was the largest contributor to overall growth, adding 1.2 percentage points to the total 5.3% growth, the minister said.
The sector’s 9.6% growth rate reflected the government’s industrial localization strategy, stronger exports of finished and semi-finished goods, and efforts to position Egypt as a regional industrial hub.
The restaurants and hotels sector continued to record strong growth as tourism rebounded, with Egypt receiving around 19 million visitors in 2025, a record figure that underscores the growing global appeal of the destination, Rostom noted.
Banking and insurance activities also supported growth, rising by 10.73% and 12.85%, respectively, helping advance financial inclusion through expanded access to banking and insurance services.
The Suez Canal saw the beginning of a partial recovery in the second quarter as stability gradually returned to the Red Sea region, alongside measures by the Suez Canal Authority (SCA) to encourage shipping traffic, he added.
Rostom also highlighted a narrowing contraction in the oil and gas sector, supported by intensified drilling and exploration programs that boosted production in recent months, as well as measures to facilitate operations for foreign partners and settle a large share of their financial dues during the current fiscal year.
