Economic Research

Stability tested by external shocks, but economic growth still expected to accelerate

Growth seen resilient amid headwinds from regional conflict

Egypt’s economy is showing further concrete signs of improvement. GDP growth hit a more than 3-year high of 5% y/y in Q2 2025 despite still-high (if easing) inflation, tight financing conditions and regional geopolitical tensions.

Inflation dropped to 12.8% in February, paving the way for interest rate cuts starting April. The CBE is expected to lower rates by 2-3% initially and by another 3-5% later in the year, easing financing costs and boosting investment.