Egypt’s economy is expected to grow between 3.5 percent and 4.5 percent in 2025 as the country continues to implement major reforms to increase investments and decrease inflation. In a recent report, the Information and Decision Support Center (IDSC) said that the International Monetary Fund expects the Egyptian economy to grow 4 percent in 2025 compared to an expected growth of 2.7 percent in 2024.
The IMF also expected Egypt’s GDP at constant prices to rise to EGP8.7 trillion in 2025 from EGP8.4 trillion in 2024. The country’s GDP at current prices will likely rise to EGP17.5 trillion pounds in 2025 from around EGP13.8 trillion in 2024.
Egypt’s economic recovery on track
Several international institutions, including the IMF, expect Egypt’s economy to witness positive growth in 2025. The country’s government has implemented several reforms in a bid to raise investments, private consumption rates and remittances. Egypt’s recovery will likely continue in 2025 with the development of Ras El-Hikma and the potential easing of geopolitical tensions in the region.
In the medium term, the IMF expects Egypt’s economic growth to increase during 2025-2029 to around 5 percent. Meanwhile, the World Bank expects Egypt’s economy to grow by 3.5 percent and 4.2 percent in 2025 and 2026, respectively. The World Bank attributed this forecast to an increase in investments and improvements in private consumption, which the bank expects to grow by 4.8 percent in 2025 compared to 4.6 percent in 2024.
The latest data from the planning ministry reveals that Egypt’s GDP growth rate was 3.5 percent in the first quarter of its 2024/25 year, up from 2.7 percent a year earlier.
Read| UAE’s GDP expected to reach $462.8 billion for the first time: Sheikh Mohammed
Challenges and outlook
Egypt’s debt-to-GDP ratio increased significantly, from 69.6 percent in 2010 to 92.7 percent in 2023, according to the International Institute for Strategic Studies. The country faced a shortage of foreign currency, and to reduce its large debt, the government shrunk its social safety net.
Egypt’s economy was severely impacted by the disruption caused by Russia’s invasion of Ukraine in 2022 which is still ongoing. The country relies heavily on wheat exports from both Russia and Ukraine. The economy, which relies heavily on tourism, remittances, Suez Canal revenues, foreign debt and capital flows, took another hit as tensions in the Middle East grew.
A report by the UNDP estimates that Egypt’s GDP would be lower by 2.6 percent in the fiscal year 2023–2024 and 1.3 percent in the fiscal year 2024-2025 in a medium-intensity scenario. UNDP also estimates the decline in tourism and the Suez Canal revenues in the two fiscal years 2023-2024 and 2024-2025 to be around $9.9 billion in a medium-intensity scenario.
The UAE’s investments in Egypt, reforms and funding from the IMF and the World Bank have supported the economic recovery in 2024 and will likely continue to support growth in 2025. Several positive indicators show that Egypt’s economy is improving. The primary fiscal surplus more than tripled to $18 billion (about 6 percent of GDP) for the fiscal year that ended in June 2024. Inflation has also declined every month since the announcement of the Ras El-Hikma deal. Foreign exchange reserves increased to $46 billion in July 2024, a record level and nearly a third more than in February.
