Egypt Daily News – Egypt’s non-oil trade deficit narrowed significantly in the first half of 2025, reaching its lowest level in six years. The deficit fell by 18% year-on-year to $14.3 billion, compared to $17.4 billion during the same period in 2024. The improvement comes primarily on the back of a sharp rise in exports.
The document highlights a substantial $4.4 billion increase in exports between January and June 2025, which helped offset a moderate 3% uptick in imports. Total exports during the period rose by 22% to $24.5 billion, while imports reached $38.82 billion.
This strong export performance is a cornerstone of Egypt’s broader economic strategy to increase foreign currency inflows and reduce reliance on external borrowing. The government has set an ambitious target to grow exports to $145 billion annually by 2030, with industrial products expected to make up $118 billion of that goal.
Export Growth Offsets Suez Canal Revenue Decline
In 2024, Egyptian exports rose by 5.4% to reach $44.8 billion, including $39.4 billion in non-oil exports, according to data released by the Central Agency for Public Mobilization and Statistics (CAPMAS) in March. This growth has been especially important in light of declining revenues from the Suez Canal, caused by ongoing security threats to maritime traffic in the Red Sea, including attacks by Houthi forces.
Minister of Investment and Foreign Trade, Hassan El-Khatib, acknowledged in a January press conference that Egypt still faces competitiveness challenges in its trade sector. He noted that exports account for just 10% of GDP, one of the lowest ratios globally, and emphasized the government’s aim to raise that share to between 20% and 30%. Meanwhile, imports currently represent about 20% of GDP, a figure El-Khatib described as not particularly high in comparative terms.
Policy Shift Links Export Support to Local Content
As part of its export development strategy, Egypt is overhauling its export subsidy program to incentivize greater use of local inputs. Under the revised scheme, exporters will need to increase the domestic content of their goods by 5% annually, with a minimum threshold of 35% local content to qualify for support.
To bolster this effort, the government has nearly doubled the allocation for export support in the 2025–2026 fiscal budget to EGP 45 billion, up from EGP 23 billion targeted in the previous fiscal year ending in June.
Key Export Markets and Leading Sectors
The document also identified five countries that together accounted for nearly 40% of Egypt’s merchandise exports in the first half of 2025, totaling $9.7 billion. The United Arab Emirates topped the list, with exports surging 163% year-on-year to $3.7 billion. Turkey followed with $1.6 billion, Saudi Arabia came third with $1.4 billion despite a 14% decline, while the United States and Italy rounded out the top five at $1.43 billion and $1.37 billion, respectively.
Sector-wise, the building materials and metals industry led the way, contributing 30% of total exports equivalent to $7.5 billion. Chemical products and fertilizers followed with 18% ($4.5 billion), then food industries at 13% ($3.3 billion), engineering goods at 12% ($3.1 billion), and agricultural products also at 12% ($2.9 billion). Ready-made garments ranked sixth, bringing in approximately $1.6 billion, or 6.5% of total exports.
Looking Ahead
Egypt’s continued focus on expanding its export base, improving the quality and competitiveness of its industrial goods, and tying financial incentives to higher local value-added is positioning the country to play a stronger role in global trade. While structural challenges remain, the latest figures suggest that export-led growth may be gaining traction offering a pathway to a more balanced and resilient economic future.
