According to a survey by Reuters, Egypt’s national economy is estimated to have grown by 4% in the past fiscal year which ends in June. This pushes past estimates of 3.8% given in April, which can be credited to reforms relating to the International Monetary Fund (IMF) plan as well as vigorous industrial activity, which points to slow but sure recuperation.
13 pertinent economists were surveyed in July between the 15th and 28th, with their outlook estimating a rise to 4.6% within the present fiscal year.
Holding the highest Arab population, Egypt is confronted with difficulties like steep loss of their currency’s value, rampant inflation, and economic repercussions consequent of regional strife.
During the fiscal year of 2023-2024, the growth of the national economy curbed to 2.4%, yet, since then, an $8 billion IMF-backed program has let the government accelerate growth.
In September 2023, inflation had topped off at a breaking 38%. Since then, however, it has started to drop along with the consumer price inflation in urban areas reaching 14.9% from 16.8% in June and May respectively.
Experts estimate that inflation could settle at an average of 12.5% in 2025-2026, 9.5% in 2026-2027, and 7.3% in 2027-2028. Despite progress, these figures hover over the Central Bank’s objective for the fourth quarter of 2026, that being between 5% and 9%.
Fuel and other energy subsidies, which drive Egypt’s inflation upwards, have been consigned to gradual omission under the new IMF-supported restructuring arrangement.
The Egyptian pound is expected to get weaker following a year of relative stability at 30.85 pounds to the dollar, as well as it having been floated in March 2024. It is forecasted to drop to 51.1 and 52.9 pounds to the dollar from its current 48.6 by the ends of June 2026 and 2027 respectively.
The decline of interest rates was also projected by the survey. The overnight interest rates of the Central Bank are expected to drop from 25% to 17.5% by the end of 2025-2026 and 13% in a year after.
All things considered, the Central Bank has cut 325 basis points off its benchmark rate in April and May due to decelerating inflation and better liquidity on foreign currency.
In spite of this, policymakers in July opted for more cautious stances, alluding to the instability of oil prices being driven by precarious supplies and incalculable global demands, forcing a step-by-step approach.
