Egypt’s economy to grow between 3.5 percent and 4.5 percent in 2025: Report

The International Monetary Fund (IMF) projects that Egypt's economic growth will accelerate to around 5% between 2025 and 2029. Meanwhile, the latest data from Egypt's Ministry of Planning shows that the country's gross domestic product (GDP) grew by 3.5% in the first quarter of fiscal year 2024/25.

Egypt's economy is expected to grow between 3.5% and 4.5% in 2025. The Egyptian government is continuously implementing major reforms aimed at increasing investment and reducing inflation. A recent report by the Information and Decision Support Center (IDSC) indicated that the IMF expects the Egyptian economy to grow by 4% in 2025, up from a projected 2.7% in 2024.

The IMF also forecasts that Egypt's GDP at constant prices will increase from EGP 8.4 trillion in 2024 to EGP 8.7 trillion in 2025. At current prices, Egypt's GDP is expected to rise from approximately EGP 13.8 trillion in 2024 to EGP 17.5 trillion in 2025.

Multiple international institutions, including the IMF, anticipate positive economic growth for Egypt in 2025. The Egyptian government has implemented several reform measures aimed at boosting investment, private consumption rates, and remittances. With the development of Ras El Hekma and the potential easing of geopolitical tensions in the region, Egypt's economic recovery is likely to continue in 2025.

In the medium to long term, the IMF projects Egypt's economic growth to reach approximately 5% between 2025 and 2029. Concurrently, the World Bank forecasts that Egypt's economy will grow by 3.5% and 4.2% in 2025 and 2026, respectively. The World Bank attributes this forecast to increased investment and improved private consumption, which is projected to grow by 4.8% in 2025, up from 4.6% in 2024.

However, Egypt's debt-to-GDP ratio has significantly increased, rising from 69.6% in 2010 to 92.7% in 2023, according to the International Institute for Strategic Studies. The country also faces a shortage of foreign currency, and the government has had to reduce social safety nets to reduce its massive debt. Furthermore, the disruption caused by Russia's invasion of Ukraine has severely impacted the Egyptian economy, which heavily relies on wheat imports from Russia and Ukraine. The escalation of tensions in the Middle East has also dealt another blow to Egypt's economy, which depends on tourism, remittances, Suez Canal revenues, external debt, and capital flows.

A report by the United Nations Development Programme (UNDP) estimates that under a medium-intensity scenario, Egypt's GDP will decline by 2.6% in fiscal year 2023-2024 and by 1.3% in fiscal year 2024-2025. The UNDP also estimates that under a medium-intensity scenario, the decline in tourism and Suez Canal revenues will be approximately $9.9 billion in fiscal years 2023-2024 and 2024-2025.

Investment from the UAE, reforms, and financial support from the IMF and the World Bank have supported Egypt's economic recovery in 2024 and are likely to continue supporting growth in 2025. Multiple positive indicators suggest that the Egyptian economy is improving. The primary fiscal surplus more than tripled to $18 billion (approximately 6% of GDP) for the fiscal year ending in June 2024. Inflation rates have also been decreasing month-on-month since the announcement of the Ras El Hekma deal. Foreign exchange reserves increased to a record high of $46 billion in July 2024, nearly a third higher than in February.

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