IMF raises Egypt’s growth forecast to 3.8 percent for 2025, 4.3 percent next year

The International Monetary Fund (IMF) has increased its growth expectations for Egypt’s economy for the current and next fiscal years by 0.2 percent, now projecting growth rates of 3.8 percent and 4.3 percent, respectively. This adjustment reflects an improvement from the January forecasts of 3.6 percent and 4.1 percent.

The Fund’s World Economic Outlook did not specify the rationale behind the increased growth expectations for Egypt, but projections indicate that the nation’s economy grew by 2.4 percent in 2024.

Egypt’s economic outlook improves

This adjustment comes as Egypt’s Minister of International Cooperation, Dr. Rania Al Mashat, expressed earlier this month her expectation that the economy would expand by 4 percent during the current fiscal year, ending on June 30, with growth anticipated to accelerate to 4.5 percent in the next fiscal year. Dr. Al Mashat also revealed that the country’s GDP at current prices is expected to reach EGP20.4 trillion ($399.8 billion) in the upcoming fiscal year. This forecast highlights the government’s commitment to stimulating economic growth despite various challenges.

Strong growth in manufacturing and tourism

In the second quarter of the current fiscal year, the Egyptian economy grew at its fastest quarterly pace in over two years, recording a growth rate of 4.3 percent, buoyed by the manufacturing and tourism sectors. This growth occurred despite a continued decline in Suez Canal revenues, which have been affected by trade tensions in the Red Sea. According to a statement from the Egyptian Ministry of Finance last week, the government estimates that the revenue losses from the Suez Canal amounted to EGP110 billion ($2.15 billion) during the nine months ending in March.

Oil prices and economic challenges

Looking ahead, the Egyptian economy is expected to benefit from a decline in oil prices, which are currently trading at about $67 per barrel, given the country’s reliance on importing petroleum products. However, Egypt is grappling with a high ratio of public debt to gross domestic product, which reached 90.9 percent in the fiscal year ending June 30, 2024, according to the Fund’s report following consultations with the Egyptian government last March.