The International Monetary Fund (IMF) has raised its projections for Egypt’s real gross domestic product (GDP) growth to 4.5% in the fiscal year (FY) 2025/26, up 0.4 percentage points from its previous forecast, according to the Fund’s latest World Economic Outlook report, titled “Global Economy in Flux: Prospects Remain Dim.”
The report highlights that economic growth in the Middle East and Central Asia is projected to accelerate from 2.6% in 2024 to 3.5% in 2025 and 3.8% in 2026, as disruptions to oil production and shipping ease and the effects of ongoing conflicts begin to subside.
The 2025 forecast has been revised upward by 0.5 percentage points compared to the April outlook, largely due to stronger-than-expected performance in Gulf Cooperation Council (GCC) countries, particularly Saudi Arabia, and in Egypt, where the Fund noted that economic activity in the first half of 2025 exceeded expectations.
For Egypt, the IMF projects real GDP growth of 2.4% in FY2024, 4.3% in FY2025, and 4.5% in FY2026.
It added that inflation is expected to moderate significantly, from 33.3% in 2024 to 20.4% in 2025 and 11.8% in 2026.
Meanwhile, the current account deficit is projected to narrow from –5.4% of GDP in 2024 to –5.1% in 2025 and –4.3% in 2026.
The unemployment rate is expected to remain stable at 7.4% in both 2024 and 2025, before edging slightly lower to 7.3% in 2026.
Globally, growth is projected to slow from 3.3% in 2024 to 3.2% in 2025 and 3.1% in 2026, with advanced economies growing around 1.5% and emerging market and developing economies just above 4%. Inflation is projected to continue to decline globally, though with variation across countries: above target in the United States, with risks tilted to the upside, and subdued elsewhere.
The report noted that risks are tilted to the downside. Prolonged uncertainty, more protectionism, and labor supply shocks could reduce growth, adding that fiscal vulnerabilities, potential financial market corrections, and erosion of institutions could threaten stability.
