Egypt’s Minister of International Cooperation, Rania Al Mashat, revealed that the country’s gross domestic product (GDP) at current prices is anticipated to reach EGP20.4 trillion ($399.8 billion) during the upcoming fiscal year. This forecast reflects the government’s efforts to stimulate economic growth amid various challenges.
Al Mashat stated that real growth is expected to rise to 4.5 percent, although this projection is subject to review if tensions escalate. The Ministry anticipates that investment and net exports will be the primary drivers of this growth, playing a crucial role in enhancing economic stability.
Investment targets for the next fiscal year
The Ministry of Planning aims for a 17 percent growth in total investments in the next fiscal year, reaching EGP3.5 trillion. This ambitious target underscores the government’s commitment to attracting both domestic and foreign investments to stimulate economic activity.
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Private sector investment projections
Private sector investments are projected to increase to 62.7 percent of total investments during the next fiscal year, amounting to EGP1.94 trillion. This marks a rise from the EGP1.6 trillion expected for the current fiscal year, which represents 61.5 percent of total investments, indicating a growing confidence in the private sector’s role in the economy.
Public sector investment increase
Public sector investments are set to rise to EGP1.16 trillion, compared to EGP1 trillion in the current fiscal year. This increase reflects the government’s strategy to bolster public spending in key areas that drive economic growth.
Financial outlook for public spending
On the other hand, the Egyptian Ministry of Finance estimates that interest expenses will constitute 49 percent of public spending during the next fiscal year, 2025-2026, reaching EGP2.29 trillion. This figure is equivalent to approximately 74 percent of public revenues, according to the financial statement issued by the Ministry of Finance.
Goals for primary surplus and overall deficit
The ministry aims to achieve a primary surplus—the difference between revenues and expenditures, excluding debt interest—of 4 percent in the new fiscal year’s budget, alongside an overall deficit of 7.3 percent of GDP. This strategy is designed to enhance fiscal sustainability and promote economic resilience.
Budget-funded investment reductions
The Ministry of Finance will continue to reduce budget-funded investments to EGP434.9 billion during the next fiscal year, compared to EGP496 billion in the current fiscal year’s budget, according to financial account data. This adjustment reflects a focus on optimizing public spending while addressing the economic challenges ahead.
In November 2024, IMF Managing Director Kristalina Georgieva projected that Egypt’s GDP growth would reach 4.2 percent in FY2025. Georgieva highlighted that Egypt’s inflation rate had soared to 37 percent in 2023 but had since decreased to between 25 percent and 26 percent. She pointed out that the nation was creating more job opportunities through the private sector and emphasized that the IMF was dedicated to supporting the prosperity of this sector to generate sufficient job opportunities for the more than one million young individuals who entered the labor market each year.
