Egypt’s Economy Expected to Expand by 4.2% in 2024 and 4.6% in 2025-2026, Predicts World Bank

Egypt’s economy is projected to see growth in the coming years, with expectations of reaching 4.2 percent in 2024 and 4.6 percent in 2025-2026, according to the World Bank’s Global Economic Prospects report. However, there is a forecasted slowdown in growth for 2023-2024, with expectations of 2.8 percent due to regional tensions impacting shipping in the Suez Canal and the tourism sector.

Several factors are expected to contribute to Egypt’s economic expansion in 2024, including increased investments, particularly in projects like Ras El Hekma with the UAE. Additionally, a rise in private consumption is anticipated as a result of remittance recovery and decreased inflation. The depreciation of the exchange rate is also expected to boost Egypt’s net exports and overall economy.

Despite these positive indicators, the report highlights fiscal pressures in Egypt. Fiscal deficits are predicted to widen, excluding the recent deal with the UAE, leading to increased interest expenses due to tighter monetary policies and currency depreciation. Social mitigation measures and decreased tax revenue from lower economic activity and consumer spending are also expected to contribute to fiscal challenges.

Risk factors to Egypt’s economy include the possibility of increased attacks on shipping in the Red Sea, which could impact economic growth by reducing external account revenues and economic activity. In the wider Middle East and North Africa region, growth is predicted to increase to 2.8 percent in 2024 and 4.2 percent in 2025, driven by a gradual rise in oil production and stronger economic activity.

The World Bank revised its forecast in June, downgrading from earlier predictions made in January, citing ongoing conflicts in the region and extensions of oil production cuts. Despite these challenges, there is optimism for growth in the coming years.