The Arab Monetary Fund (AMF) projects Egypt’s economy will grow by 4.2% in 2025 and accelerate to 4.7% in 2026, supported by looser monetary restrictions and increased investment activity.
In its Arab Economic Outlook Report 2025, the AMF said Egypt’s transition in 2024 from a fixed exchange rate to a market-led regime had helped contain external imbalances and attract foreign direct investment. The Fund noted that Egypt benefits from a diversified export base and a strong services sector, while inflows from Gulf and Western support funds continue to bolster financial stability.
Despite persistent global headwinds and geopolitical tensions, the AMF said the Egyptian economy remains on a path to recovery.
The Fund expects Egypt’s inflation rate to decline to 17.9% in 2025 and then to 11.9% in 2026, citing the Central Bank of Egypt’s ongoing efforts to curb price growth.
It noted that inflation surged to 35.4% in 2023, driven largely by repeated pound devaluations against the US dollar. The local currency has been devalued several times since 2016, most recently in March 2024, when the exchange rate was fully liberalised to be determined by supply and demand.
The AMF added that inflationary pressures in 2023 and 2024 stemmed from the weaker pound and Egypt’s heavy reliance on imports. However, a drop in global commodity prices helped inflation ease to 17.9% in 2024, paving the way for further moderation in the coming years.
