Egypt’s real GDP growth to rise to 4.9 percent for FY2024/2025, Goldman Sachs

Cairo – April 4, 2024: In a recent note, international financial institution Goldman Sachs revealed that it expects Egypt’s real GDP to accelerate to 4.9 percent in the coming fiscal year starting in July 2024 (FY2024/2025). It also provided a positive outlook for the country’s inflation and interest rates, expecting interest payments to decline steadily over the long term.

Seen by the Arab World News Agency, the report shares that Goldman Sachs predicts the country’s real GDP growth to average between 6-6.5 percent for FY2025/2026.

Egypt aims to hit a 4 percent GDP growth rate during FY2024/2025, explained Minister of Finance, Mohamed Maait during his meeting with President Abdel Fattah El-Sisi, and Prime Minister Mostafa Madbouly at the end of March.

The US institution’s projection is only slightly higher than the International Monetary Fund’s own projections of 4.7 percent, which was revealed by an IMF Research Department division head, Daniel Leigh, in late January.

Goldman Sachs explained that Egypt’s total financing needs will remain high and not fall below 30 percent of the gross domestic product, adding that debt burdens have risen sharply in recent years due to a combination of external financing pressures and tightening financial conditions.

It believes that Egypt can attain a primary budget surplus of 3.5 percent of its GDP in the coming fiscal year, and remain at that level for the next 3 fiscal years. The estimate mirrors Egypt’s own expectations.

The note praised Egyptian authorities’ relatively strong record, highlighting the Ministry of Finance’s ability to consistently achieve a primary budget surplus over the past 6 years, averaging 1.3 percent of the country’s GDP.

The institution believes that the primary surplus will begin to shrink after the coming 3 fiscal years, but will remain at a positive level until FY2033/2034.

The total debt-to-GDP ratio will see a significant decline in the coming 2 fiscal years, it wrote. Including Gulf countries’ deposits with the Central Bank of Egypt, Egypt’s debt-to-GDP ratio reached a peak of 112 percent of GDP back in FY2022/2023, but it predicts a steady drop to 103 percent in FY2023/2024 and 92 percent during FY2024/2025.

Goldman Sachs explained that the sales of state assets contribute to non-debt financing of the budget and have provided an opportunity for the government to reduce its debt.