EBRD cuts Egypt’s GDP growth forecast for 2025, 2026

Updated 5/14/2025 7:59:00 AM

Arab Finance: The European Bank for Reconstruction and Development (EBRD) slashed its forecast for Egypt’s real gross domestic product (GDP) growth in 2025 and 2026 by 0.2% compared to its February expectations, according to the bank’s Regional Economic Prospects report.

In this regard, Egypt's real GDP forecasts for 2025 and 2026 are 4% and 4.5%, respectively.

EBRD expected the output growth to increase to 3.8% in fiscal year (FY) 2024/2025 and 4.4% in FY 2025/2026, compared to 2.4% in FY 2023/2024.

Growth rose to 3.9% year-on-year (YoY) in the first half (H1) of FY 2024/2025, compared with 2.4% during the July-December period in 2023. This was backed by expansion in manufacturing, transportation, and wholesale and retail trade.

The report highlighted that the manufacturing sector began to recover following a strong contraction when Egypt experienced a foreign exchange (FX) shortage before March 2024.

As for the oil and gas sector, the output continued to decline, which represents a key issue for government policy in FY 2024/2025 and FY 2025/2026, including the resolution of arrears to global energy companies.

Inflation dropped to 12.8% in February 2025, marking its lowest level since March 2022, and is projected to continue declining amid the central bank’s tight monetary policy stance, the report showed.

EBRD also elaborated that surging fuel prices could put pressure on consumer prices. This falls under the government’s commitment to reach cost recovery by the end of the year in line with the IMF-supported program.

Net international reserves increased to $47.4 billion last February, recording their highest level in over 20 years. They are anticipated to remain stable, according to the report.