Egypt’s Economy Posts Strongest Quarterly Growth Since 2022 as Factories Roar Back

Manufacturing booms with 16.3% surge, but energy slump and Suez dip weigh on momentum

Egypt’s economic engine is humming again. After more than a year of slowdowns and shaky confidence, the country posted 4.77% GDP growth in the third quarter of its 2024/25 fiscal year — its sharpest expansion since late 2022.

The rebound is mostly powered by an industrial revival that’s giving policymakers something to finally smile about. But the numbers also come with a warning label: oil and gas are still sinking, and Suez Canal revenues aren’t helping either.

Industry’s Comeback Fuels Growth Spurt

If there was one clear standout in the report, it was manufacturing.

The sector — battered by regional instability, currency slides, and power shortages over the past two years — came storming back with 16.3% growth in Q3. That’s not just a recovery. That’s a reset.

Just a year ago, factories were shrinking at a pace of 3.9%. Industrial zones in 6th of October City and Sadat City were laying off workers or scaling down. Now, machine tools are buzzing again, and cement kilns are heating up.

The Ministry of Planning didn’t offer a detailed sectoral breakdown, but local analysts suggest that recovery in textile production and processed foods helped lift the broader output. Several factories that had slowed production due to input shortages have reportedly ramped up operations following better access to foreign currency since early 2025.

One economist in Cairo joked, “We finally turned the lights back on in our factories — and it shows.”

Oil and Gas Drag Down the Overall Picture

Not everything’s shiny though.

Egypt’s once-mighty energy sector is still stuck in reverse. Oil and gas contracted by 10.38% in Q3, underscoring the deepening challenges for a country that wants to be a Mediterranean energy hub but can’t seem to fix its core production problems.

• Egypt is aiming to drill 110 new wells this fiscal year — part of a $1.2 billion plan.

• A bigger $7.2 billion strategy targets 586 wells by 2030.

• Yet, production continues to slide, with some existing fields facing natural depletion.

Just last year, Energy Minister Tarek El Molla celebrated new finds in the Western Desert, but these have so far failed to meaningfully offset losses from older blocks.

At the same time, gas exports via pipeline to Europe and LNG terminals have slowed, squeezed by falling domestic output and rising consumption.

The Suez Canal Isn’t Lifting Like It Used To

The other headache? Suez Canal receipts.

Normally a source of hard currency and national pride, the canal has hit rough waters lately. Revenues for Q4 came in at $900 million — down from $1.1 billion a year earlier, according to fresh data from the planning ministry.

That’s a big hit.

Much of the drop is tied to disruptions in Red Sea shipping caused by the conflict in Gaza and Houthi attacks near Bab el-Mandeb. Some global shipping giants — including Maersk and Hapag-Lloyd — have rerouted around the Cape of Good Hope to avoid threats, even if it means extra days at sea.

The Suez, which carried nearly 12% of global trade pre-2023, is now bleeding both relevance and revenue in real time.

Year-on-Year Growth Snapshot

To give a clearer picture of how things have shifted since last year, here’s a comparison of key sectors:

One official from the ministry, who didn’t want to be named, said the numbers are encouraging but warned that inflation remains a serious concern. “Wage gains are being swallowed by prices,” he said bluntly.

Can Egypt Keep the Momentum Going?

That’s the million-pound question.

The Central Bank has been tightening rates and stabilizing the exchange rate after multiple devaluations. Inflation, which peaked at over 35% last year, has cooled but remains above 20%. Foreign reserves are inching up, but foreign direct investment is still lagging behind expectations.

There’s cautious optimism inside government halls. But ordinary Egyptians are still hurting.

A fruit seller in Giza summed it up: “They say the economy is growing, but I’m still paying more for onions every week.”

That feeling — of a disconnect between macro gains and kitchen-table struggles — continues to fuel frustration.

What to Watch Ahead of the New Fiscal Year

Looking forward, the fourth quarter may offer even more telling signs about where Egypt is headed.

There are three things to keep an eye on:

• Will industrial growth sustain, or was Q3 a one-off sugar high?

• Can the government fix the energy slump without sinking more dollars?

• And will Red Sea disruptions ease enough to let Suez breathe again?

Some in the business community are calling on the government to fast-track reforms in energy licensing, customs processing, and land allocation for factories.

Others want the focus to shift toward small and medium-sized businesses, arguing that they’re the real engine behind jobs and local growth.