The EBRD report projects that gross domestic product (GDP) growth will rise from 2.4% in fiscal year 2024 to 3.8% in fiscal year 2025 and 4.4% in fiscal year 2026, on an annual basis. The bank expects growth to reach 4% in 2025 and 4.5% in 2026, respectively. Growth increased to 3.9% year-on-year in the first half of fiscal year 2025 (July-December 2024), compared to 2.4% in the same period the previous year. This is attributed to expansion in the manufacturing, transportation, and wholesale and retail sectors.
The report issued by the EBRD indicated a recovery in the manufacturing sector after a period of contraction during the period of foreign currency shortages prior to March 2024. Conversely, output in the oil and gas sector declined, which the government is seeking to address by settling arrears to international energy companies. The report emphasized that growth prospects depend on the implementation of structural reforms, particularly those related to the state's role in the economy, along with continued reductions in debt levels and associated service costs. It also noted the risks surrounding the economy due to uncertainty in international trade policies.
Dr. Al-Mashat commented on the report, saying, "The positive growth forecasts for the Egyptian economy reflect the effectiveness of economic reform policies." She noted that despite global economic challenges, Egyptian economic performance indicators showed a marked improvement in economic growth during the first and second quarters of the current fiscal year, rising from 3.5% to 4.3%. Growth is expected to continue in the third and fourth quarters, with the economy expected to reach a growth rate of 4% by the end of the year.
She noted that the state continues to strengthen macroeconomic stability policies and consolidate public finances, as well as moving forward with the implementation of the national structural reform program, which supports sustainable growth and improves the business environment and investment climate for greater private sector participation. She added that the state has a primary goal related to achieving private sector-led economic growth.
The report also addressed inflation rates, which fell to 12.8% in February 2025, its lowest level since March 2022, and is expected to continue declining, reflecting the Central Bank's tightening monetary policy. Moreover, high fuel prices, part of the government's commitment to achieving cost recovery by the end of the year under an International Monetary Fund (IMF)-supported program, could increase inflationary pressure. Net international reserves rose to $47.4 billion in February 2025, their highest level in more than 20 years, and are expected to remain stable.
The report issued by the EBRD is consistent with the forecasts issued by the World Bank (WB) during its Spring Meetings, which projected economic growth to rise to 3.8% in the current fiscal year and then 4.2% in the next fiscal year. The IMF also forecasted that the Egyptian economy would grow by 3.8% in the current fiscal year and 4.3% in the next fiscal year. It also expected GDP growth to rise to 3.8% in the 2025 fiscal year and 4.2% in 2026, driven primarily by private consumption, lower inflation, and a relative improvement in investor confidence.
Al-Mashat added that the forecasts of the two largest financial institutions, the WB and the IMF, and the report issued by the EBRD, for increased growth in the Egyptian economy in the current and next fiscal year, reflect the tangible results of the structural reforms implemented by the state, which focus on improving the investment environment, supporting the private sector, and enhancing the economy's resilience to shocks. She noted that the government aims to achieve comprehensive and sustainable economic growth that contributes to creating real job opportunities and improving living standards, which requires continuing and expanding the scope of reforms.
She also stressed the state's intention to strategically shift towards economic growth based on tradable and export-oriented sectors, through stimulating investment, localizing industry, and implementing integrated measures to simplify investment procedures and reduce customs clearance times.