Egypt’s Economy Projected to Grow 4% as IMF Reforms Take Hold
The latest Reuters poll has indicated a positive outlook for Egypt’s economy, with a projected growth of 4% in the fiscal year ending June 2025. The forecast also anticipates a further acceleration to 4.7% in 2025/26 and 5.0% in 2026/27. This promising trajectory is largely attributed to the successful implementation of reforms under the International Monetary Fund (IMF) programme.
After a challenging period in 2023/24, when GDP growth plummeted to 2.4% due to a currency crisis and disruptions caused by the conflict in neighboring Gaza, Egypt has managed to bounce back. The war significantly impacted key revenue streams such as the Suez Canal and tourism.
In March 2024, Egypt signed an $8 billion financial reform deal with the IMF, following a $24 billion agreement with a UAE sovereign wealth fund for a real estate investment project on the Mediterranean coast. These strategic partnerships have played a crucial role in stabilizing and revitalizing the Egyptian economy.
Leading economists like James Swanston of Capital Economics are optimistic about Egypt’s economic prospects, predicting a 5% growth for the current fiscal year. Swanston highlights the benefits of a weaker Egyptian pound, which has boosted export-oriented industries by enhancing global competitiveness.
The IMF’s World Economic Outlook and the World Bank offer similar projections for Egypt’s GDP growth, with estimates ranging from 3.5% to 4.1% in the coming years. Egypt’s Ministry of Planning has also set a target of 4% growth for the 2024/25 fiscal year.
Recently, the IMF announced a staff-level agreement on the Fourth Review of the Extended Fund Facility for Egypt. This agreement could lead to the disbursement of a $1.2 billion tranche in January, as confirmed by Egyptian Finance Minister Ahmed Kouchouk. These developments signify a continued commitment to economic stability and growth in Egypt.
