The European Bank for Reconstruction and Development (EBRD) raised its forecast for Egypt's economic growth to 3.8 per cent in fiscal year 2024/25, up from 2.4 per cent in the previous year, according to a Cabinet statement Thursday. In its latest Regional Economic Prospects Report, the EBRD said the country recovers from foreign currency shortages that had weighed on manufacturing. The bank also projected Egypt's GDP growth would further accelerate to 4.4 per cent in fiscal year 2025/26. On a calendar-year basis, growth is expected to reach 4 per cent in 2025 and 4.5 per cent in 2026. The bank noted that manufacturing activity is rebounding following March 2024's currency reforms, but flagged declining oil and gas output as a concern. Egypt has pledged to resolve arrears owed to international energy companies to stabilise the sector. "The manufacturing sector began to recover following a strong contraction during the time of foreign exchange shortages prior to March 2024. Output in the oil and gas sector continued to decline and is considered a key issue for government policy in FY25 and FY26, including the resolution of arrears to international energy companies" the EBRD report read. Economic growth reached 3.9 per cent year-on-year in the first half of fiscal year 2024/25, up from 2.4 per cent in the same period a year earlier. Minister of Planning, Economic Development, and International Cooperation Rania Al-Mashat said the improved outlook reflects the impact of Egypt's economic reforms and macroeconomic stabilisation efforts. Despite global headwinds, Minister Al-Mashat said Egypt saw growth rise from 3.5 per cent in the first quarter to 4.3 per cent in the second quarter of the current fiscal year, with full-year growth projected to reach 4 per cent. The report stressed the need for structural reforms and debt reduction to support medium-term growth, while warning of risks tied to global trade policy uncertainty. Inflation dropped to 12.8 per cent in February 2025—the lowest rate since March 2022— with the EBRD expecting it to decline further, supported by the central bank's tight monetary stance. However, rising fuel prices under Egypt's International Monetary Fund (IMF)-backed cost recovery programme could add inflationary pressure. Rising fuel prices, as part of the government's commitment to reach cost recovery by the end of the year under the IMF-supported programme, may put upwards pressure on consumer prices. EBRD report also cited the country's surge in its net international reserves to $47.4 billion in February, their highest level in over two decades, and with expectations to remain stable. The EBRD's forecast aligns with those from the World Bank and the IMF, which also see Egypt growing by 3.8 per cent in fiscal year 2025 and by more than 4 per cent the following year. Both institutions cite improved investor sentiment, private consumption, and falling inflation as key drivers. Minister Al-Mashat said the convergence of forecasts from the EBRD, World Bank, and IMF underscores confidence in Egypt's reform agenda. Attribution: Amwal Al Ghad English Subediting: Y.Yasser Download
