IMF upgrades Egypt’s growth forecast amid regional downturn

Egypt’s economic prospects have received a slight boost from the International Monetary Fund, which raised its growth projections for the country over the next two years, even as it downgraded expectations for the wider Middle East and North Africa (MENA) region.

In its newly released World Economic Outlook, the IMF adjusted Egypt’s real GDP growth forecast upward by 0.2 percentage points for both 2024 and 2025. The revised estimates suggest Egypt’s economy will expand by 2.4 percent this year, followed by growth of 3.8 percent in 2025 and 4.3 percent in 2026.

The report did not provide a clear rationale for the improved outlook, but the IMF is expected to delve into in its upcoming regional report.

Meanwhile, Egypt’s government has struck a more confident tone. Earlier in April, Minister of Planning and Economic Development Rania Al-Mashat projected that GDP growth would hit 4 percent by the end of the current fiscal year on June 30. She also forecast an acceleration to 4.5 percent in the 2025/2026 fiscal year.

Lower revenues from the Suez Canal, a key source of foreign currency, remains a factor after taking a significant hit due to geopolitical disruptions affecting shipping routes in the Red Sea. According to the Ministry of Finance, the canal lost EGP 110 billion (roughly $2.15 billion) in the nine months ending in March.

Concerns over fiscal sustainability remain, with Egypt’s public debt-to-GDP ratio climbing to 90.9 percent in the fiscal year ending June 2024, as outlined in the IMF’s March Article IV consultation. That figure places the country well above the average for emerging markets.

On the inflation front, the IMF sees a downward trend ahead. After peaking at 33.3 percent in 2024, inflation in Egypt is projected to slow to 19.7 percent in 2025 and further to 12.5 percent in 2026, offering potential relief to consumers after years of rising prices.