Egypt's Economic Growth Forecast

By Patrick Werr
CAIRO (Reuters) – Egypt's economic growth is expected to reach 4.0% by the end of June 2025, as austerity measures from an International Monetary Fund (IMF) program take effect, according to a Reuters poll conducted between October 9 and 23 with 13 economists.

The poll indicates that GDP growth will likely rise to 4.7% in 2025/26 and 5.3% by 2026/27.

GDP growth dropped to 2.4% in 2023/24, down from 3.8% the previous year, primarily due to a currency crisis and the impact of the Gaza war, which negatively affected Suez Canal revenues and tourism.

In February, Egypt sold development rights for real estate on its Mediterranean coast to the UAE's ADQ for $24 billion, facilitating an $8 billion financial reform deal with the IMF the following month.

James Swanston from Capital Economics noted that while Egypt's economic outlook is improving, progress is slow. He stated that fiscal policies will remain strict to reduce the budget deficit and debt-to-GDP ratio. Benefits from a weaker pound are emerging, but interest rates are expected to remain high at 22.25% until Q1 2025, potentially uplifting households and businesses.

The poll forecasts annual inflation rates of 20.4% in 2024/25 and 11.4% in 2025/26. Inflation rose slightly in the past two months to 26.4% in September, down from a peak of 38.0% in September 2023.

The IMF projected Egypt's economy will grow 4.1% in calendar 2025. Analysts expect the Egyptian pound to further weaken, with predictions of 50.4 EGP/USD by the end of June 2025 and 52.0 EGP/USD by June 2026. Following an initial fixed exchange rate, the pound is currently valued at roughly 48.8 EGP/USD.

Analysts anticipate the central bank's overnight lending rate will decrease to 14.25% by June 2026.

(Polling conducted by Devayani Sathyan and Rahul Trivedi; Writing by Patrick Werr and Hugh Lawson)