Minister of Planning, Economic Development and International Cooperation Reviews the Economic and Social Development Plan for the Next Fiscal Year at the House of Representatives' Plenary Session

 

Corrective Fiscal and Monetary Policies and Governance of Public Investments Enhance the Notable Improvement in the Egyptian Economy's Performance

EGP 20.4 Trillion Value of GDP at Current Prices in Fiscal Year 2025/2026 (at Constant Prices)

We Expect Investment Spending and Net Exports to Contribute the Largest Share to Growth Rates in the New Fiscal Year's Plan

For the First Time.. EGP 3.5 Trillion Total Targeted Investments, Representing 17.1% of GDP

Increase in Private Investments to EGP 1.94 Trillion, Representing 62.7% of Total Investments

 

 

H.E. Dr. Rania A. Al-Mashat, Minister of Planning and Economic Development and International Cooperation, stated that the government's reform interventions, implemented since March 2024 at the level of fiscal and monetary policies and the governance of public investments, have led to a notable improvement in the performance of the Egyptian economy in recent times.

This came during the Minister's review of the targets and main features of the draft Economic and Social Development Plan for the fiscal year 2025/2026, within the framework of the medium-term plan (2025/2026 – 2028/2029), before the House of Representatives today, chaired by H.E. Counselor Dr. Hanafy Gebaly, and in the presence of the esteemed members of the House.

 

 

Improvement in Macroeconomic Indicators

 

The Minister highlighted the notable improvement in economic growth during the first and second quarters of the current fiscal year, rising from 3.5% to 4.3%, with expectations of reaching around 4.1% and 4.2% in the third and fourth quarters, respectively, bringing the economy's growth rate to 4% by the end of the year.

This was driven by the achieved growth in key sectors, particularly non-oil manufacturing industries, alongside the recovery of the tourism sector and the growth of the communications and information technology sector. This growth is also attributed to the Egyptian government's adoption of clear policies to consolidate macroeconomic stability, in addition to enhancing the governance of investment spending and slowing the growth of public investments in favor of creating space for private sector investments.

 

H.E. Dr. Al-Mashat added that the manifestations of improvement in the Egyptian economy's performance also include the growth of tourism revenues to $4.8 billion in the first quarter of fiscal year 2024/2025, compared to $4.5 billion in the corresponding quarter of fiscal year 2023/2024, and the narrowing of the decline in Suez Canal revenues during the last three months of 2024 from 63% in October 2024 to 59.2% in December 2024, until the rate of decline reached 23.8% in February 2025. Additionally, foreign exchange reserves at the Central Bank of Egypt increased on an annual basis to record $47.4 billion at the end of February 2025, compared to $35.3 billion in February 2024, a growth rate of about 34%.

 

H.E. Dr. Al-Mashat outlined that among the manifestations of this improvement is the continued containment of inflation, particularly with its downward trend last March due to the base period effect, while continuing to monitor and review energy prices according to global developments and local production costs.

Furthermore, the value of remittances from Egyptians working abroad increased to $17.1 billion in the first half of fiscal year 2024/2025, compared to $9.4 billion in the corresponding period of fiscal year 2023/2024. There was also a surge in net foreign direct investment from $10 billion in fiscal year 2023/2024 to $46.1 billion in fiscal year 2024/2025.

 

 

Targets of the Economic and Social Development Plan for the Next Fiscal Year

 

H.E. Dr. Rania Al-Mashat reviewed the targets of the 2025/2026 plan, emphasizing that an economic growth rate of around 4.5% is estimated to be achieved, which is a relatively high rate compared to the modest rate of 2.4% recorded in 2023/2024 due to the direct impact of economic and geopolitical crises. Targeting this rate also reflects a positive direction for continuing recovery from their repercussions.

 

H.E. Minister Al-Mashat stressed the importance of monitoring the repercussions of geopolitical and economic developments in the Middle East and the world, and the uncertainty they impose, due to the potential negative impact on the targeted growth rate.

 

H.E. Dr. Al-Mashat affirmed that GDP is expected to rise to about EGP 9.1 trillion at constant prices in fiscal year 2025/2026, reaching about EGP 20.4 trillion at current prices, compared to about EGP 17.3 trillion expected in fiscal year 2024/2025, an increase of 18%. The three sources of economic growth will contribute positively and balancedly to achieving the targeted growth rate of 4.5%, with final consumption expenditure contributing about 27%, investment spending contributing 37%, and the net change in exports contributing 36%.

 

The Minister of Planning and Economic Development and International Cooperation touched upon the sectoral contributions to GDP for fiscal year 2025/2026, noting that the wholesale and retail trade, agriculture, manufacturing industries, real estate activities, transportation, and social services sectors constitute the drivers of rapid economic growth due to their large relative weight in GDP and the growth of their commodity and service activities according to the priority scale set in the plan.

 

 

Total Investments for the Next Fiscal Year

 

H.E. Dr. Al-Mashat pointed to the growth in the targeted total investments in the plan, reaching EGP 3.5 trillion for the first time, compared to the expected investments for fiscal year 2024/2025 of about EGP 2.6 trillion, and the actual investments for fiscal year 2023/2024 of EGP 1.8 trillion. She affirmed that these indicators demonstrate the state's conviction in the important role that investment plays as a fundamental and active driver of economic growth.

 

The Minister also emphasized the continued rise in the investment rate to record 17.1% of GDP in fiscal year 2025/2026, compared to lower rates in the previous two years, where it reached 15% in fiscal year 2024/2025 and 13% in fiscal year 2023/2024. She pointed to the achievement of the required balance in the investment contributions of the three sectoral groups that make up the expected GDP in fiscal year 2025/2026.

 

H.E. Minister Al-Mashat added that private investments are expected to increase to about EGP 1.94 trillion, with a contribution rate of 62.7% of the total, compared to 37.3% for public investments, in light of the state's direction to support efforts aimed at accelerating the pace of private sector growth while emphasizing the principles of good governance and competitive neutrality.

 

H.E. Dr. Al-Mashat also referred to the allocation of approximately EGP 1.16 trillion as targeted public investments in the 2025/2026 plan, compared to expected investments in 2024/2025 of around EGP 1 trillion. This is within the framework of the state's commitment to the credit ceiling set in this regard to the governance of public investments, reduce the debt burden resulting from servicing domestic and foreign public debt, and provide wider areas for private sector participation in development efforts. The distribution structure of public investments reveals that government agencies account for 37.6%, public economic authorities for 43.3%, compared to 19.1% as local investments at the level of governorate general directorates.

 

She affirmed that the 2025/2026 plan generally aims to continue raising the efficiency of public investment, both in the planning and resource allocation phase and in the implementation follow-up and performance evaluation phase, by emphasizing the importance of adhering to the proposed mechanisms for developing and raising the efficiency of public investments.

 

H.E. Minister Al-Mashat added that follow-up and performance evaluation work, according to the programs and performance methodology, includes monitoring the implementation of the plan in line with the targets of Egypt's Vision 2030 and the government's work program, monitoring the indicators of sectoral strategies and verifying their alignment with the plan's targets, monitoring the impact of public investment on improving international indicators, monitoring the impact of program implementation on localizing sustainable development in the governorates, evaluating the plan's impact on the transition to a green economy, in addition to evaluating the plan's impact on considering social priorities.