The International Monetary Fund (IMF) raised on Tuesday its forecast for Egypt's economic growth in 2025 and 2026, projecting stronger momentum and a sharp drop in inflation as macroeconomic conditions stabilise. According to its October World Economic Outlook, the IMF expects Egypt's real gross domestic product (GDP) to grow 4.3 per cent in 2025 and 4.5 per cent in 2026, up from 4.0 per cent and 4.1 per cent, respectively, in its July forecast. "Behind these upgrades is the notable improvements that we have seen in the non‐oil manufacturing sector, the tourism sector, as well as the telecommunications sector." Petya Koeva Brooks, Deputy Director for the Research Department at the IMF, said during a press briefing. "The buoyancy in those sectors has very much offset the declines that we have seen in the Suez Canal activity, as well as in the mining and extraction activities" Brooks added. Sharp drop in inflation ahead Consumer price inflation is projected to ease significantly, falling from an estimated 33.3 per cent in 2024 to 20.4 per cent in 2025 and 11.8 per cent in 2026. "Now, when it comes to inflation, we are expecting it to decline further over the forecast period. And one favourable development has been the fact that in August, inflation hit a 40‐month low." Brooks said. "And that was very much due to the restrictive — to the tight monetary and fiscal policies, as well as the easing of FX shortages, in addition to the waning effects of depreciation." Current Account Deficit, Unemployment The Fund also anticipates a gradual narrowing of Egypt's current account deficit, from -5.4 per cent of GDP in 2024 to -5.1 per cent in 2025 and -4.3 per cent in 2026, reflecting a stronger export performance and moderating import demand. Unemployment is seen edging down slightly to 7.4 per cent in 2025 and 7.3 per cent in 2026, compared with 7.4 per cent in 2024, signalling a gradual recovery in labour market conditions. The IMF's upgraded outlook comes as Egypt pushes ahead with fiscal and structural reforms under its $8 billion loan programme, aimed at restoring macroeconomic stability, curbing inflation, and attracting foreign investment. Canal activity to recover soon Brooks added that the IMF expects some stabilisation in Suez Canal and mining output by 2026, alongside continued strength in the non-oil sectors driving the country's growth momentum. "So, again, going forward into 2026, we expect some stabilisation in the Suez Canal and mining activities, together with continued strong growth in the sectors (non‐oil manufacturing and tourism) that I mentioned earlier." Attribution: Amwal Al Ghad English Download
