Reviewing The Egyptian Economy’s Performance in FY2023/24

Updated 10/12/2024 9:00:00 AM

Egypt’s economy in fiscal year (FY) 2023/24 faced tough challenges, primarily due to ongoing regional conflicts. Geopolitical tensions disrupted trade through the Suez Canal, slashing its revenues and affecting the country’s foreign currency inflows.

These external issues, combined with local contractionary policies, hampered Egypt’s ability to maintain steady growth. As a result, the country’s recovery and economic strengthening were slowed.

In this Factsheet, we review the Egyptian economy’s performance over the past year and highlight key sectors contributing to economic growth.

Egypt’s gross domestic product (GDP) reached EGP 13.2 trillion. The agriculture sector led contributions to GDP with EGP 1.91 trillion, representing 14.5%, followed by 14.4% for wholesale and retail and 12% for transformative industries.
The Egyptian government initially targeted a GDP growth rate of 4.1% for FY2023/24, which was later raised to 4.4% by the end of the FY’s first quarter (Q1). On the other hand, international economic institutions projected an economic growth range of 3.7 to 4.8%.
Contrary to the local targets and international projections, the government’s recent data showed Egypt's GDP growth rate reached 2.4% in the past FY, down from 3.8% in FY2022/23.
The War in Gaza, which started at the beginning of Q2 FY2023/24, negatively impacted navigation through the Suez Canal. The number of vessels passing through the canal fell by 22.2% in FY2023/24, leading to a 3% decline in revenue. Hence, the Suez Canal’s contribution to GDP witnessed a negative growth rate of 30%.
The economic slowdown in FY2023/24 was also affected by a contraction in oil and gas extraction activities, which fell by 1.7%, and 13%, respectively.
Despite the various challenges faced by the Egyptian economy, some sectors showed flexibility and recorded significant positive growth rates: IT (14.4%), tourism (9.9%), wholesale and retail (6.1%), construction and building (5.7%), social services (5.6%), and agriculture (3.8%).
As for the current FY2024/25, the Egyptian government has set a GDP growth target of 4.2%. International institutions, including the International Monetary Fund (IMF), the World Bank, and the European Bank for Reconstructions and Development (EBRD), project growth rates ranging from 3.2% to 4.2% for FY 2024/25.

By: Amina Hussein