World Bank Keeps Egypt’s GDP Growth At 3.5% For FY24/25

January 21, 2025

 

The World Bank has kept its projection for Egypt’s real gross domestic product (GDP) growth at 3.5% for the current FY2024/2025, while raising the forecast to 4.2% for FY2025/2026, according to the Global Economic Prospects report released on January 16.

These projections are in line with the World Bank’s projections released in October 2024.

According to the report, Egypt’s economic activity will be fueled by private consumption, buoyed by easing inflation rates, remittance inflows, and improved sentiment, as well as investments supported by financing from the UAE.

Conversely, the International Monetary Fund (IMF) has recently revised its projections for Egypt’s real GDP growth downward. In its January 2025 World Economic Outlook (WEO) report, the IMF reduced its forecasts for FY2024/2025 and FY2025/2026 by 0.5% and 1%, respectively.

The IMF now anticipates growth rates of 3.6% for FY 2024/2025 and 4.1% for FY 2025/2026, compared to its previous estimates of 4.1% and 5.1%.

These differing perspectives from the World Bank and IMF highlight contrasting views on the pace of economic recovery and the impact of inflationary trends on Egypt’s economy.

MENA real GDP growth recovers

On a regional level, the report projects real GDP growth in the Middle East and North Africa (MENA) region to rise to 3.4% in 2025 up from 1.8% in 2024. This growth will be further elevated to reach 4.1% in 2026, thanks to an expected rise in oil production. 

The 2025 forecast has been revised downwards since June, mainly due to several major oil-exporting countries extending their voluntary oil production cuts. The World Bank reports stated that the regional outlook remains highly uncertain due to geopolitical conflicts. 

Growth in oil-importing countries is projected to increase to 3.7% in 2025, with further growth to 4% in 2026, the report added.

GCC growth

For counties in the Gulf Cooperation Council (GCC), the World Bank report expects their growth to reach 3.3% in 2025 and 4.6% in 2026. This marks a 1.4 percentage point downgrade from the June forecast, driven by the continued voluntary cuts in oil production. In non-GCC oil-exporting countries, economic activity is expected to remain weak due to these adjustments.

The report showed that in countries belonging to the GCC, including Saudi Arabia, growth is estimated to have picked up to 1.6% in 2024, “primarily because of strong non-oil activity supported by robust labor markets and a recovery in capital inflows.”

Global outlook

Global growth is projected to expand by 2.7% in both 2025 and 2026. However, the report highlights that these growth prospects may not be sufficient to offset the damage caused by several years of successive negative shocks, particularly in the most vulnerable countries.

On a positive note, the report forecasts commodity prices to decline by 6% in 2025 and 2% in 2026, reaching their lowest levels since 2020. Commodity prices have already fallen by about 3% in 2024.

Additionally, the report predicts that global headline inflation will decrease to an average of 2.7% in 2025-2026, in line with target levels in many advanced economies, emerging markets, and developing economies.