Economic expansion accelerates to 4% in 2025
Egypt’s economic growth is set to accelerate, according to the European Bank for Reconstruction and Development (EBRD). The lender forecasts output to expand to 3.8 per cent in fiscal year 2024/25, up from 2.4 per cent in the previous year, and then to 4.4 per cent in fiscal year 2025/26.
Egypt’s fiscal year runs from July 1.On a calendar-year basis, the EBRD anticipates growth of 4 per cent in 2025 and 4.5 per cent in 2026.
The EBRD’s “Regional Economic Prospects” report, seen by The Egyptian Gazette, highlighted that growth had already picked up to 3.9 per cent year-on-year in the first half of fiscal 2024/25 (July-December 2024), compared with 2.4 per cent in the same period a year earlier.
This expansion was attributed to stronger activity in manufacturing, transportation, and wholesale and retail trade.
The report noted a recovery in Egypt’s manufacturing sector following significant contraction due to foreign exchange shortages prior to March 2024. However, it pointed out that declining output in the oil and gas sector remains a key policy challenge for the government in the coming fiscal years, including addressing arrears owed to international energy companies.
Inflation has eased to 12.8 per cent in February 2025, the lowest level since March 2022, and is expected to continue its downward trend, reflecting the central bank’s tight monetary policy.
Nevertheless, the EBRD cautioned that rising fuel prices, driven by the government’s commitment to cost recovery under its IMF-backed programme, could exert upward pressure on consumer prices. In positive news, net international reserves reached a two-decade high of $47.4billion in February 2025 and are projected to remain stable.
Structural reforms
The growth outlook depends on theimplementation of structural reforms, particularlyrelated to the state’s presence in the economy,and the continued reduction of debt levels andassociated service costs.
“Risks to the outlook arerelatively high given international trade policyuncertainty and Egypt’s continued reliance onportfolio investment from abroad as a source ofexternal financing,” it said.
Regional economic growth
As for the region, EBRDhas lowered its regional economic forecast for 2025 by 0.2 percentage points relative to its February 2025 projections. According to the Regional Economic Prospects report, economies in which the EBRD invests are now projected to grow by an average of 3.0 per cent this year, with a modest recovery to 3.4 per cent expected in 2026.
This downward revision follows a similar 0.3 percentage point cut in February and reflects a confluence of global headwinds, as captured in the title of the new report, “Uncertain times”.
“These include a sharp rise in trade and economic policy uncertainty, weaker external demand, and the direct and indirect effects of newly announced import tariff increases. As a result, most economies across the EBRD regions have seen their 2025 growth projections trimmed, with the largest downward revisions recorded in the Western Balkans, central Europe, and the Baltic states,” it said.
