Egypt: 2025 Economic Overview

Image credit: Shutterstock / John Wreford

A 2024 appraisal report on Egypt’s economy, inked by international affairs think tank Chatham House, has pointed to the IMF’s desire for the authorities to ‘level the playing field‘ between the public and the private sector.

It notes the pervasive hand of the military in all sectors of the economy, from construction, food production, and distribution to pharmaceuticals, tourism, and so on.

The report rightly wonders how successful any attempts to reverse this situation could realistically be, if made at all.
Surprisingly though, investment is on the rise in Egypt’s private sector.

Rising contribution to GDP

In May 2024, Planning and Economic Development Minister Hala El Said announced that Egypt’s private sector investment share had scaled 40% during the current fiscal year, adding that the objective was for a further rise to 50% in the next.

Moreover, the private sector’s contribution to GDP reached 71% for the period, confirming its role in the nation’s goals for sustainable development and employment.

Her words, spoken during the Public Sector Meets Private Sector: Unleashing Sustainable Investment in Egypt session at the IFC Day in Egypt conference, confirmed progress on the second of two key pillars of Egypt’s economic reform, namely expanding the real economy by championing private sector participation.

The first phase, which kicked off in 2016, pertained to financial and monetary intervention and investment in strategic infrastructure and related projects to enhance the economic matrix.

Here, we encounter a familiar chicken-and-egg scenario where, on the one hand, President Abdel Fattah el-Sisi is seemingly wary of limiting job-creating megaprojects, while the IMF warns of the need for a reduction in public spending.

Regardless, both of the above pillars underpin Egypt’s structural reform plan launched in late 2021. Meanwhile, Egypt’s overarching Vision 2030 aims to steer the nation towards becoming a knowledge-based society.

How about the numbers?

Egypt is Africa’s third-largest economy with a GDP of USD358 billion, trailing South Africa and Nigeria respectively on USD401 billion and USD395 billion.

The economy thrives on key sectors of hydrocarbons, mining, agriculture, tourism, construction, and transportation—in 2023, services in total accounted for approximately 51%, with industry at around 33%, tourism 24%, and agriculture 11%.

According to World Travel and Tourism Council (WTTC), data for annual tourism revenues stands at around USD20 billion, representing close to 21% above the historic peak.

The oil and gas sector also stumps up 24% of GDP, and so hydrocarbon production and trade are stalwarts of the local economy.

Egypt has proven oil reserves of 3.3 billion barrels plus natural gas reserves of 63 billion cubic feet. Where commerce is concerned, 72 of Egypt’s 115 bilateral investment treaties (BITs) signed with nations including China, India, and the US are active.

Egypt also operates a free trade agreement with Turkey. Since 2016, the country has operated a more favorable customs regime to promote foreign investment.

Real GDP appreciated by 2.4% by the end of 3Q of 2024, as the Central Bank revealed in its Financial Stability Report of October 2024, despite mounting geopolitical anxiety.

That figure was down, however, from the previous year’s 3Q print of 4.1%.

The report stressed the significance of the local financial system overall in supporting financial intermediation throughout 2023 and the first quarter of 2024, notably ensuring adequate financing for key economic sectors.

The banking sector received particularly high marks, its assets representing 116.9% of nominal GDP and 92.3% of total financial system assets.

The banking sector’s financial position as of March 2024, exceeding all regulatory ratios set by the CBE and Basel Committee requirements, sustained confidence in the broader market. Meanwhile, the non-banking financial sector for the period claimed 9.8% of nominal GDP and 7.7 percent of total financial system assets.

The manufacturing sector is also growing, a fact the Minister attributes to economic reform measures initiated in March.

Other robust performers confirming success in economic diversification were telecommunications & IT, up 14.4%; tourism, including restaurants and hotels, up 9.9%; wholesale and retail trade, up 6.1%; construction and building, up 5.7%; and social services, notably health and education, up 5.6%, transport and storage activities up 5.45, and agriculture up 3.8%.

Eyes on the future

The IMF forecasts 4.1% growth for 2025.

In early 2024, Egypt secured a game-changing USD24 billion deal with the UAE’s sovereign fund, the Abu Dhabi Developmental Holding Company (ADQ), granting development rights for real estate along its Mediterranean coastline.

Buffering the Egyptian economy, the agreement prompted an USD8 billion financial reform package with the IMF in March 2024.

And in October, economists polled in a Reuters survey expected Egypt to grow 4% by June 2025, with the alleviation of the IMF’s earlier austerity measures that had determined its program.

The poll forecasts GDP growth accelerating to 4.7% in the fiscal year 2025/26 and further to 5.3% by 2026/27.

Contributors noted the fallout of the neighboring Gaza war weighing on the Suez Canal and tourism revenues.

Earlier, we cited the Chatham House think tank, home of the Chatham House Rule that, in the interests of garnering accurate information without fear of reprisal, usually maintains the anonymity of contributors.

In Egypt’s case, however, commentators are openly citing encouraging numbers and forecasts, albeit qualified by caveats to keep the economy righted amid international crosswinds.