Egypt’s parliament has approved the government’s economic and social development plan for fiscal year (FY) 2025/26, which aims to achieve a 4.5 percent economic growth rate despite the challenges posed by ongoing regional instability.
The plan, presented by Planning Minister Rania Al-Mashat to the House of Representatives, marks a significant recovery from the 2.4 percent growth recorded in FY 2023/24.
Preliminary indicators for the first nine months of the current fiscal year (2024/25) suggest an improving growth trajectory, according to government assessments.
Read: Egypt’s central bank cuts interest rates as growth accelerates, inflation slows
Increased investments, focus on private sector
The new plan sets total public investments at EGP 1.16 trillion ($22.89 billion), up from an expected EGP 1 trillion in the current fiscal year.
The increase reflects the government’s strategy to rationalize public spending, reduce public debt, and create more room for private sector participation in national development.
Private sector investment is projected to rise to approximately EGP 1.94 trillion, accounting for 63 percent of total investments, compared to 37 percent from the public sector.
The plan prioritizes allocating public funds to projects with high completion rates to maximize impact.
Planning amid challenging circumstances
Following the parliamentary vote, Minister Al-Mashat emphasized that the plan was developed under “delicate circumstances” that have grown “more complex in light of the surrounding and accelerating regional developments.”
She stressed the need for a “flexible planning approach and continuous monitoring” of economic targets, adding that the government remains prepared to revise its projections if external conditions deteriorate.
Al-Mashat also expressed her gratitude to parliament for its support, praising lawmakers for their “serious discussions and valuable observations” during the deliberation process.
The FY 2025/26 plan underscores Egypt’s effort to balance fiscal discipline with growth ambitions, as the country continues to navigate external pressures while aiming to boost domestic economic resilience.
Egypt pushes ahead with economic reforms
Egypt is pressing forward with a broad agenda of macroeconomic stabilization and structural reforms, backed by the International Monetary Fund (IMF), the World Bank, and other international development partners.
Despite reform efforts and significant policy adjustments introduced since March 2024, the country’s external accounts continue to face considerable pressure.
This ongoing strain is largely attributed to deep-rooted structural challenges, including high public debt levels, weak export performance, and underwhelming private sector activity and productivity.
Compounding these issues are the geopolitical tensions in the Middle East, particularly their impact on Suez Canal revenues — a critical source of foreign exchange for Egypt.
Growth outlook improving
Nevertheless, Egypt’s medium-term growth prospects show signs of gradual improvement. Real GDP growth is projected to rise from 2.4 percent in FY2023/24 to 3.8 percent in FY2024/25, then to 4.2 percent and 4.6 percent in FY2025/26 and FY2026/27, respectively, according to World Bank projections.
This expected recovery is fueled by easing inflation, which is boosting household consumption, and a rebound in private investment, supported by ongoing reform momentum and international financial assistance.
The government’s focus remains on unlocking Egypt’s economic potential by fostering a more dynamic private sector, improving productivity, and addressing longstanding fiscal vulnerabilities.
