As of early 2025, Egypt’s economy is showing signs of stabilization despite geopolitical and structural challenges. External liquidity has improved, inflation is easing, and monetary policy has become more accommodative. After a period of volatility, the macroeconomic environment is showing cautious optimism.
The World Bank and IMF both upgraded Egypt’s growth forecast for FY 2024–25 to 3.8%, with the IMF projecting growth to reach 4.3% in FY 2025–26. This is primarily driven by recovering private consumption and a decline in inflation, which the World Bank expects to average 20.9% in FY 2024–25, down from 33.6% the previous year. The IMF forecasts a further drop to 12.5% in FY 2025–26, aligning with the Central Bank of Egypt’s (CBE) target of 7% ±2% by 2026.
However, Egypt's external sector remains vulnerable. Suez Canal revenues are projected to fall in FY 2024–25, well below pre-crisis levels, but a partial recovery is expected in FY 2025–26. The current account deficit is expected to widen to 5.8% of GDP before narrowing to 3.7% in FY 2025–26.
In terms of debt management, Egypt is facing rising debt servicing costs, projected to rise 30% to EGP 2.1 trillion in FY 2025–26. The government plans to issue EGP 2.2 trillion in treasury bills and EGP 928.9 billion in treasury bonds locally.
To enhance the business climate, Egypt is implementing significant tax and regulatory reforms. The government is replacing various fees charged by multiple agencies with a single additional tax on net income. This new system will be facilitated through a digital platform to improve efficiency and transparency, aiming to reduce administrative burdens and overlap.
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