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Inflation has been cooling rapidly, averaging 15.7% between January and July 2025—half the pace recorded a year earlier. August’s figure of 12% marked the lowest level since March 2022, and many analysts believe this downward trajectory will continue.
The European Bank for Reconstruction and Development (EBRD) has revised upward its forecast for Egypt’s economic growth in 2025, now expecting the economy to expand by 4.8%, compared with 4% in its May estimates, according to EBRD’s latest Regional Economic Prospects report.
The report highlighted stronger-than-anticipated activity across key sectors, particularly manufacturing, wholesale and retail trade, and transportation, which helped lift overall growth expectations for the year ending June 2025 to 4.5%.
For FY2025-26, the lender continues to project growth at 4.4%, while keeping its 2026 outlook unchanged at 4.5%. The International Monetary Fund foresees growth of 4.1% this fiscal year, gradually rising to 4.6% in FY2026/2027, while Fitch Solutions’ research arm BMI expects 4.7%.
Deutsche Bank is more aligned with the EBRD’s optimism, projecting 4.8% growth on the back of stronger domestic demand. Egypt’s economic performance in 2024 also exceeded earlier estimates, with growth now assessed at 3.1%, up from the 2.9% figure previously anticipated.
At the same time, inflation has been cooling rapidly, averaging 15.7% between January and July 2025—half the pace recorded a year earlier.
August’s figure of 12% marked the lowest level since March 2022, and many analysts believe this downward trajectory will continue.
Remittances surged by 82.7% year-on-year during the period from July 2024 to March 2025, while foreign investors have returned to the local debt market, holding nearly 45% of outstanding treasury bills by March.
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However, debt sustainability remains a pressing concern. Servicing costs are expected to absorb around 65% of government revenues in FY2025/2026, with the EBRD warning that slow progress on structural reforms continues to weigh on Egypt’s long-term growth potential.
In the broader regional context, growth across the southern and eastern Mediterranean is projected at 3.7% in 2025 and 3.2% in 2026, supported by a revival in tourism, increased remittances, and more balanced external accounts.