CAIRO – 2 January 2025: International organizations are projecting moderate growth for Egypt's economy in 2025, with estimates ranging between 3.5% and 4.5%. This optimistic outlook follows a turbulent period shaped by global economic challenges and geopolitical tensions. According to the latest report from Egypt's Cabinet Information and Decision Support Center (IDSC), the global economic slowdown in 2024, driven by tightening monetary policies, inflation concerns, and continued geopolitical uncertainties, had a notable impact on Egypt's economic prospects.
The International Monetary Fund (IMF) has forecasted a 4% growth rate for Egypt in 2025, up from 2.7% in 2024. This growth is expected to be fueled by ongoing economic reforms, with a focus on investments such as the development of the Ras Al-Hekma project on Egypt's northwestern coast. The IMF also projects Egypt’s nominal GDP to reach EGP 17.5 trillion in 2025, a significant increase from EGP 13.8 trillion in 2024.
Similarly, the World Bank is optimistic about Egypt’s recovery, predicting a 3.5% growth rate for 2025, followed by a further rise to 4.2% in 2026. The World Bank attributes this growth to the gradual recovery of the economy, driven by a series of key reforms aimed at fostering a better business environment and increasing private sector participation.
Fitch Solutions also shares a positive outlook, forecasting a 3.7% growth rate for the 2024/2025 period. The recovery of the non-oil export sector, combined with an increase in foreign direct investments, is expected to be a primary driver of this growth. Additionally, improved private consumption, thanks to lower inflation rates, is anticipated to contribute to the economic recovery.
The country’s economic reform agenda has already begun to show tangible results. One of the most notable achievements is the historic reduction in unemployment, which fell to 6.5% in Q2 of 2024, the lowest in over two decades. These positive developments are attributed to large-scale national projects, privatization efforts, and improved governance in state-owned enterprises. The IMF has projected that the unemployment rate will continue to decline, reaching 6.4% by 2029.
Fitch Solutions also points to improvements in private consumption, which is expected to grow by 4.8% in 2025 as inflation continues to ease and incomes rise. The combination of increased consumption, rising investments, and remittances from Egyptians abroad is expected to provide further stability to Egypt's economy and contribute to its growth in the coming year.
As Egypt moves forward with its reform initiatives and strengthens its economic foundations, international institutions remain confident that the country is on track to achieve solid economic growth in 2025.
Comments
Leave a Comment