The International Monetary Fund (IMF) has upgraded its forecast for Egypt’s real GDP growth in the fiscal year 2025/2026 to 4.5%, up from an earlier estimate of 4.3% (July 2025). This upward revision signals positive economic momentum, driven by a stronger-than-anticipated performance in the first half of 2025 and sustained structural reforms.
The accelerated growth is primarily propelled by a rebound in the non-oil manufacturing sector, a recovery in tourism, and strong activity in the communications and information technology (CIT) sector. This buoyancy has successfully offset declines in Suez Canal receipts (due to Red Sea tensions) and mining activity. The recovery is underpinned by key macroeconomic stabilization measures, including the liberalization of the foreign exchange regime (which spurred a near 40% depreciation of the pound in 2024) and substantial foreign capital inflows, notably the $35 billion Ras el-Hekma investment from the UAE.
A major indicator of returning stability is the IMF’s projection for inflation. The average annual CPI inflation rate is expected to fall sharply to 11.8% in FY2025/2026, down from an estimated 20.4% in FY2024/2025. This significant easing is crucial for protecting household purchasing power and restoring a stable business environment. Unemployment is also projected to edge down slightly to 7.3%. Despite the positive momentum, the IMF cautions that key structural reforms—such as firmly reducing the state’s economic footprint and accelerating divestment—must be decisively implemented to ensure sustained, inclusive, and job-led growth.
