Egypt’s economy is expected to grow by 4% in fiscal year 2025, up from 2.4% in 2024, according to Fitch Ratings. The agency attributed the projected recovery to improving confidence and progress on macroeconomic stabilisation under the country’s International Monetary Fund (IMF) programme.
Growth is forecast to accelerate to 4.7% in fiscal 2026, though still below the country’s estimated potential growth rate. The forecast comes as Egypt navigates structural reform challenges and fiscal pressures.
Fitch noted that while the government remains committed to the IMF programme, which focuses on macro-fiscal stability, structural reforms to enhance competitiveness and reduce external imbalances have been limited. Measures implemented so far include tax system adjustments, reduced tax exemptions for state-owned enterprises, and improved customs procedures. Progress on state divestment has been modest.
Fitch has affirmed Egypt’s long-term foreign-currency issuer default rating at “B” with a stable outlook.
The fiscal deficit is projected to widen to 7.4% of GDP in FY 2025, up from 3.3% in FY 2024, which one-off revenues from the Ras El-Hekma real estate transaction had supported. The increase also reflects high-interest payments on public debt.
The economic impact of regional conflicts continues to affect key revenue channels. Suez Canal receipts are expected to recover only partially, reaching about 60% of 2023 levels by FY 2026. Tourism revenue, which grew 5% in FY 2024, is projected to rise 9% in FY 2026, though Fitch warns that further escalation of regional instability could pose risks to the sector.
