The Impact of Manufacturing Industries on Economic Growth in Egypt during the Period (1974-2023)

Abstract

This study aimed to investigate the impact of the manufacturing industries on economic growth in Egypt from 1974 to 2023. The study examined the development of the Egyptian manufacturing sector during this period. Additionally, it analysed the backward linkages of manufacturing industries and their macroeconomic direct and indirect effects, using the Egyptian input-output table for the fiscal year 2016/2017. To understand the relationship between different branches of the manufacturing sector—divided into five key activities—and economic growth in the long run, the study employed a polynomial distributed lag (PDL) model. The results of the study indicated that the indirect effects realised outside the manufacturing sector surpassed the direct effects. Moreover, the econometric model confirmed that the long-term effects of growth in various branches of the manufacturing industry consistently exceeded their immediate effects. The study recommends the adoption of policies that enhance the reliance on domestic components in manufacturing industries and reduce the percentage of imports utilised.