Egypt’s economy is projected to grow by 4.0% by June 2025 as it begins to recover from austerity measures linked to an International Monetary Fund (IMF) program, according to a recent Reuters survey of economists.
The poll, conducted from October 9 to 23, anticipates GDP growth will accelerate to 4.7% in the fiscal year 2025/26 and rise further to 5.3% by 2026/27. In the current fiscal year 2023/24, GDP growth is expected to fall to 2.4%, down from 3.8% the previous year.
Key challenges include a currency crisis and ongoing conflict in neighboring Gaza, which have negatively impacted tourism and Suez Canal revenues.
Earlier this year, Egypt secured a major agreement with the UAE’s ADQ sovereign fund for $24 billion in development rights for real estate along its Mediterranean coast. This deal facilitated an $8 billion financial reform package with the IMF in March.
James Swanston from Capital Economics noted that while Egypt’s economic outlook is gradually improving, strict fiscal policies will remain essential to address the budget deficit and the debt-to-GDP ratio. He highlighted that the benefits of a weaker pound are beginning to materialize.
Although inflation is slowing, it is expected to remain high, with forecasts of 20.4% for 2024/25 and 11.4% for 2025/26. Inflation slightly rose to 26.4% in September, down from a peak of 38.0% in 2023.
The IMF also estimates a 4.1% growth rate for Egypt’s economy in 2025. Analysts predict further depreciation of the Egyptian pound, forecasting it to reach about 50.4 per dollar by the end of June 2025 and 52.0 by June 2026.
The central bank previously maintained the pound’s value at 30.85 to the dollar until it was allowed to float in March 2024; the current exchange rate is around 48.8 to the dollar.
Additionally, analysts expect the central bank’s overnight lending rate to decrease to 22.25% by June 2025 and further to 14.25% by June 2026, providing much-needed support for households and businesses in the coming years.