World Bank Projects Positive Economic Outlook for Egypt in FY 2024/2025 with a Growth Estimate of 3.8%
The World Bank has maintained its forecast for Egypt’s economic growth at 3.8% for the current fiscal year 2024/2025, reflecting a stable outlook compared to its previous estimates released in April, according to the latest Global Economic Prospects report.
The report highlights that Egypt has navigated the recent uncertainty surrounding trade tariffs more effectively than many had feared — and more successfully than some of its regional peers — signaling economic resilience amid global headwinds.
This projection is 0.3 percentage points higher than the Bank’s January forecast, which came before the escalation of global trade tensions. Meanwhile, the outlook for the next fiscal year (2025/2026) remains unchanged.
A government official told Al Arabiya that Egypt has received numerous requests to issue sovereign sukuk, indicating strong investor interest and confidence in Egypt’s sovereign financing instruments.
Despite the positive tone, the World Bank’s forecast is slightly more conservative than government projections, which anticipate GDP growth of 4% in FY 2024/2025, 4.5% in FY 2025/2026, and 5.0% in FY 2026/2027.
The Bank attributes its optimism over the next three years to strong private consumption, rising private investment — especially under the new investment agreement with the United Arab Emirates — expected monetary easing, and a gradual rebound in industrial activity.
Additionally, the report cites macroeconomic stability, reduced political tensions, and a recovering tourism sector as key drivers of the projected economic improvement.
The World Bank also expects Egypt’s current account deficit to narrow by FY 2025/2026, supported by lower oil and gas prices, increased remittance inflows, and a surge in tourism revenues.
Moreover, it anticipates a reduction in the non-oil trade deficit as the impact of the previous year’s import backlog continues to fade.
However, despite the optimistic outlook, the report warns of widening fiscal deficits in oil-importing countries, including Egypt, during 2025. This is largely due to rising interest payments and a drop in non-tax revenues following a one-off boost from the Ras El Hekma deal with the UAE.
Nevertheless, the Bank projects a slight narrowing of the deficit in FY 2025/2026 as Egypt continues fiscal consolidation efforts — particularly through further energy subsidy reductions and improved tax revenue mobilization.
On the downside, persistently high inflation is expected to keep poverty levels elevated in the short term.