Egypt is in one of its most meaningful recovery periods in recent memory. After months of hardship shaped by a sharp currency fall, soaring inflation, and the spillover effects of the Gaza conflict, signs of genuine rebuilding are beginning to appear. The first quarter of the 2025/26 fiscal year delivered a bright spot: GDP rose by 5.3%, up from 3.5% the previous year. For many Egyptians, this improvement goes beyond numbers; it feels like the first real hint that stability may be returning.
This renewed momentum didn’t appear overnight. It reflects years of structural reforms, fresh foreign investment, and a growing belief among global institutions that Egypt is on a steadier path. With growth projected to hover around 5% in FY 2025/26, the country is adjusting its expectations and slowly shaping a new outlook for the decade ahead.
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The recovery is supported by strong economic indicators and improved activity across key sectors. After slowing to 2.4% in FY 2023/24, growth has climbed again, driven by expansions in manufacturing, ICT, and tourism. These sectors are currently doing the heavy lifting, even as areas like the Suez Canal and extractive industries continue to feel the impact of shifting global trade and regional uncertainty.
Government reforms remain central to this progress. Policies aligned with the IMF, such as greater currency flexibility, tighter monetary controls, clearer regulations, and reduced public spending, have created more room for the private sector to thrive. Major agreements, including the UAE’s $35 billion Ras El Hekma deal, helped stabilise foreign reserves and restore confidence. Today, private investment accounts for roughly half of all new investments, reflecting a business climate that is steadily improving.
Across Africa, Egypt’s progress is noticeable. Its 5.3% growth rate places it ahead of several major economies wrestling with inflation and currency weakness. Its manufacturing gains are stronger than those seen in Nigeria and Kenya, while tourism and ICT performance match the momentum in Morocco, Kenya, and South Africa. Although the country still faces heavy fiscal pressure and global risks, its reform efforts and large capital inflows have given it an advantage over economies where restructuring has been slower.
Egypt’s current progress has deep roots. The country has weathered political upheaval, repeated currency crises, and an inflation shock between 2022 and 2023. Investments in transport networks, logistics capacity, a resilient tourism base, and the steady rise of digital services all helped set the stage for this recovery. These long-running efforts are now giving policymakers room to act more decisively and chart a clearer path forward.
The road ahead, however, is far from simple. Inflation remains burdensome, external debt is high, and the currency still faces pressure if global markets shift. Heavy imports expose the country to food and energy price swings, while tensions in the region continue to threaten tourism and trade. These challenges will require careful management and steady policymaking.
However, opportunities are equally significant. Manufacturing is expected to expand as global companies diversify supply chains. Tourism could grow further with new destinations and infrastructure upgrades. Digital services, fintech, and outsourcing are becoming stronger pillars of the economy. Large projects like Ras El Hekma may reshape investment patterns, while Egypt’s ambition in hydrogen and renewable energy positions it as a rising force in North Africa’s green transition.
Egypt’s rebuilding phase is still unfolding. The foundations being laid today, stronger reforms, growing private investment, and steady sectoral growth, have the potential to push the country toward a more resilient and competitive future. If the momentum holds, Egypt could emerge from this period with a more stable economy and a clearer sense of direction for the decade ahead.
