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Economic and political overview

Economic Overview

Egypt is classified as a lower middle-income country by the World Bank and has considerable potential to capitalize on its established manufacturing and services sectors, a large domestic market, and its strategic location as a gateway to Africa, Asia, and Europe. Growth is expected to gradually recover from an estimated 2.5% in FY24 (July 2023-June 2024) to 3.5% in FY25 and 4.2% in FY26, driven by favourable base effects and investment, particularly from the UAE deal related to the Ras El Hekma development (data World Bank). In 2024, lower gas and oil exports, along with a decline in Suez Canal revenues due to the Middle East conflict, significantly impacted economic activity.

Concerning public finances, Egypt implemented an economic reform program comprising fiscal consolidation measures, the introduction of a floating exchange rate and large cuts in subsidies. The budget deficit is expected to increase from 3.6% of GDP in FY24 to 7.0% in FY25, primarily due to higher interest payments and the fading impact of the one-off Ras Elhekma deal, before declining with fiscal consolidation (World Bank). External financing needs remain significant, driven by maturing debt and arrears to International Oil Companies. Additionally, the widening current account deficit could pressure foreign currency reserves, particularly if the Middle East conflict persists. The debt-to-GDP ratio was estimated at 90.9% by the IMF, with a downward trend expected over the forecast horizon (to 79.1% by 2026). The share in the hands of external lenders only accounts for around one-third of GDP. According to the OECD, consumer price inflation reached 26.3% year-on-year in October, continuing to suppress domestic demand. While food prices slowed, disinflation has stalled since summer due to increased energy and public transport prices, linked to cuts in budget subsidies for these sectors. The organization also invited Egyptian authorities to continue fighting inflation by keeping monetary policy tight and restraining public investment projects that are not urgently needed.

The unemployment rate stood at 7.2% in 2024, according to the IMF estimates, with female unemployment being around four times higher than for males. The economic recovery is expected to lead to a further decline in unemployment, with the rate projected to drop to 6.9% by 2026. However, it is estimated that three-quarters of all employees are paid as unofficial workers, 29.7% of the population lives below the poverty line and 4.5% live in extreme poverty, a ratio that has been decreasing in recent years (CAPMAS – latest data available). Finally, GDP per capita (PPP) was estimated at USD 20,799 in 2024 by the IMF.

 
Main Indicators 2023 (E)2024 (E)2025 (E)2026 (E)2027 (E)
GDP (billions USD) 393.83380.04345.87387.24431.16
GDP (Constant Prices, Annual % Change) 3.82.73.64.15.2
GDP per Capita (USD) 3,7443,5423,1603,4693,786
General Government Balance (in % of GDP) -5.7-6.6-9.1-7.5-5.1
General Government Gross Debt (in % of GDP) 95.990.984.579.173.9
Inflation Rate (%) 24.433.321.214.410.4
Unemployment Rate (% of the Labour Force) 7.27.27.46.96.4
Current Account (billions USD) -4.71-24.93-22.07-17.45-16.94
Current Account (in % of GDP) -1.2-6.6-6.4-4.5-3.9

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

Agriculture contributes 11.6% of Egypt’s GDP and employs 19% of the active population (World Bank, latest data available). The sector has historically been important for Egypt, and it accounts for about 20% of total exports and foreign exchange earnings. The country has 3.5 million ha of agricultural land and just 45,000 ha of forests (FAO). The warm climate and the abundant Nile water allow for several annual harvests. The main crops are cereals, cotton, sugar cane and beetroots. The country is also a major producer of long-staple cotton, which is used in the textile industry. Fisheries in Egypt occupy vast areas of more than 13 million acres, equivalent to approximately 150% of their agricultural land. According to the latest official governmental figures, Egypt's agricultural exports experienced a 17% surge in 2024, reaching a noteworthy USD 10.6 billion and setting a record level of 8.6 million tons. According to the report, the list of the top agricultural exports includes: citrus fruits, fresh potatoes, fresh onions, grapes, fresh and dry beans, sweet potatoes, mangoes, fresh tomatoes, fresh garlic, fresh strawberries, guavas, and pomegranates.

Egypt's non-oil industry remains rather limited. With automotive manufacturing, steel, cotton cultivation, textile production and the construction industry, the secondary sector accounts for 32.1% of the GDP and employs 29% of the workforce (World Bank). Overall, the manufacturing sector alone accounts for 15% of GDP, whereas the mining industry accounts for only 1%, but is a strategic sector at the centre of the country’s development plan, as the government aims at increasing its share of GDP to 5% over the next two decades. Despite economic diversification efforts, the country continues to depend on the Suez Canal for a large part of its foreign income. Egypt's oil and gas industry is the key driver of the economy, accounting for more than one-fifth of GDP and standing as the country's largest industrial sector (data U.S. Trade Administration). Preliminary government data shows a production increase of 200 mmcf/d of natural gas and 39,000 bbl/d of oil between July and October 2024. Egypt’s non-petroleum industrial exports surged 73.8% to USD 32.5 billion in FY2023/2024, highlighting sectoral progress.

Finally, the services sector represents 51.3% of the Egyptian GDP and employs more than half of the population (53%). It is largely dominated by revenues from the telecommunications (approximately 4% of the total GDP as per the National Telecom Regulatory Authority) and tourism sectors. According to official governmental figures, Egypt’s tourism revenue more than doubled in a decade, reaching USD 15.3 billion in 2024 from USD 7.2 billion in 2014. Inbound tourists rose 59.6%, from 9.9 million in 2014 to 15.8 million in 2024  and the government is planning to expand Egypt's hotel capacity and enhance tourism infrastructure. Small local grocers dominate Egypt’s retail market, accounting for over USD 13 billion in sales and about 60% market share. However, competition in the food retail sector is intensifying as local and international players focus on pricing and product innovation (data USDA).

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 18.7 28.6 52.7
Value Added (in % of GDP) 11.6 32.1 51.3
Value Added (Annual % Change) 4.1 -0.6 6.2

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Egyptian Pound (EGP) - Average Annual Exchange Rate For 1 USD 10.0317.7817.7717.6016.03

Source: World Bank - Latest available data.

 

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Foreign Trade

Trade represents 40% of the country's GDP (World Bank). The Egyptian market has been gradually opening up, with the ratification of various free trade agreements, especially the European Free Trade Association (EFTA) and the African Continental Free Trade Area (AfCFTA). Petroleum products (oil and gas) are the most traded items, both for imports and exports. In 2023, petroleum and electricity were the main exports (USD 14 billion, 32.9% of the total), followed by ready-made garments (USD 2.3 billion, 5.4%), urea fertilizers (USD 2.1 billion, 4.9%), plastics and articles thereof (USD 2 billion, 4.7%), and natural gas (USD 1.95 billion, 4.6%). Non-oil imports fell 4.8% to USD 55.1 billion, while petroleum and electricity imports dropped 8.5% to USD 17.3 billion. Intermediate goods led with 36.3% of total imports, followed by investment goods (17.9%), fuel (14.6%), and consumer goods (12.5%). Key declines included iron and steel (-6.1% to USD 5.1 billion), plastics (-5.5% to USD 4.8 billion), wheat (-4.3% to USD 3.5 billion), and pharmaceuticals (-1.2% to USD 2.8 billion - data Central Agency for Public Mobilization and Statistics).

In 2023, Egypt's main export partners were Türkiye (9.0%), Italy (7.5%), Saudi Arabia (6.4%), the United Arab Emirates (5.3%), the United States (4.6%), and Libya (4.3%); whereas imports came chiefly from China (15.6%), the United States (6.5%), Saudi Arabia (6.3%), Germany (4.9%), and Italy (3.9% - data Comtrade). In terms of port activity, the Alexandria Port led exports, handling 32% of the total, followed by Cairo International Airport with 14.8% and Suez Port at 14.4%. On the import side, Cairo International Airport accounted for 30.4%, Dekheila Port handled 13.9%, and Ain Sokhna managed 13.5% - data CAPMAS).

The Egyptian economy has a structural trade deficit, which was estimated at 2.2% of GDP in 2023 (from -6.8% one year earlier - World Bank). In the same year, the country’s total exports of goods stood at USD 39.8 billion (-22.2% compared to one year earlier amid lower hydrocarbon prices), whereas imports decreased to USD 78.9 billion (-17.5% year-on-year). As for services, Egypt exported USD 37 billion (+17.3% y-o-y thanks to the positive performance of the tourism sector), importing USD 19.7 billion (-22.1% y-o-y – data WTO). According to preliminary figures from the government, Egyptian exports reached a historic USD 40 billion in 2024.

 
Foreign Trade Values 20192020202120222023
Imports of Goods (million USD) 70,99160,48874,45395,67078,895
Exports of Goods (million USD) 29,00027,07841,31051,28039,853
Imports of Services (million USD) 21,19318,19923,12625,39819,767
Exports of Services (million USD) 25,05115,05321,89731,57437,047

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20192020202120222023
Foreign Trade (in % of GDP) 41.132.129.937.040.4
Trade Balance (million USD) -29,285-29,234-34,471-27,024-25,690
Trade Balance (Including Service) (million USD) -25,428-32,381-35,700-20,848-14,047
Imports of Goods and Services (Annual % Change) -8.6-18.70.524.31.1
Exports of Goods and Services (Annual % Change) -2.7-23.7-13.857.331.4
Imports of Goods and Services (in % of GDP) 24.519.719.321.921.3
Exports of Goods and Services (in % of GDP) 16.612.510.615.119.1

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20242025 (e)2026 (e)2027 (e)2028 (e)
Volume of exports of goods and services (Annual % change) -6.54.28.28.47.7
Volume of imports of goods and services (Annual % change) 9.72.812.711.112.2

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Egypt is a member of the following international economic organisations: WTO, Arab Monetary Fund (AMF), ICC, Black Sea Economic Cooperation Zone (BSEC) (observer), G-15, G-24, G-77, Common Market for Eastern and Southern Africa (COMESA), IMF, Arab League, among others. For the full list of economic and other international organisations in which participates Egypt click here. International organisation membership of Egypt is also outlined here.
Free Trade Agreements
The complete and up-to-date list of Free Trade Agreements signed by Egypt can be consulted here.
 

Main Partner Countries

Main Customers
(% of Exports)		 2023
Türkiye 9.0%
Italy 7.5%
Saudi Arabia 6.4%
United Arab Emirates 5.3%
United States 4.6%
See More Countries 67.3%
Main Suppliers
(% of Imports)		 2023
China 15.6%
United States 6.5%
Saudi Arabia 6.3%
Germany 4.9%
Italy 3.9%
See More Countries 62.9%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President: Abdel fattah El-Sisi (since June 2014 ; re-elected for a second term in March 2018)
Prime Minister: Mostafa Madbouli (since June 2018)
Next Election Dates
Presidential: 2029
Parliamentary: 2025
Current Political Context
The domestic political landscape ushered in a wide victory for President Abdel Fattah al-Sissi in the presidential election held in December 2023. This electoral win has been in accordance with the 2019 constitutional revision, granting the president his third six-year term since 2014. This act will seal his incumbency, meaning there will be no continuation after this term. Moreovre, 2025 will mark an eventful time for parliamentary politics in Egypt: the Senate elections in August and the House of Representatives elections in October.
On the horizon of international politics, Egypt remains central to regional conflicts, solidifying its role as a key partner for bilateral and multilateral cooperation. Its proximity to the Gaza Strip makes its involvement in the Israel-Hamas war unavoidable, particularly through the Rafah border crossing, which facilitates international aid and serves as the primary exit for Gaza residents. At the same time in the Red Sea, Houthi rebel attacks are posing a threat to shipping companies, redirecting major carriers to alternative routes, resulting in a general decrease in traffic through the Suez Canal with a loss of income for the Egyptian government. Finally, on 1 January 2024, Egypt became part of the BRICS group, following an invitation that was issued during the 2023 BRICS Summit in Johannesburg. The move is expected to strengthen Egypt's economic and diplomatic ties with member states, providing new opportunities for trade, investment, and cooperation.   
Main Political Parties

Out of more than 100 parties, only about 20 are under the dome of Parliament, 5 have parliamentary bodies with more than 10 deputies within the House. These parties are:

  • Mostakbal Watan (Nation's Future Party): nationalist, populist
  • Al Shaab Al-Gomhouri (Republican People’s Party): nationalist
  • New Wafd Party: liberalism, conservatism
  • Homat El-Watan (Homeland’s Defenders Party): centrist
  • Modern Egypt: centre-right, liberalism
  • Reform and Development Party: liberalism, centrist, it is the main opposition party
  • Egyptian Social Democratic Party: social democratic

Other parties include

  • Freedom Party
  • Conference Party
  • Al-Nour Party
  • National Progressive Unionist Party (Tagammu)
  • Justice Party
  • Eradet Geel Party.
Executive Power
The President is the Head of State and the Supreme Commander of the armed forces. He is elected for a six-year term of office. The President is the head of the executive branch and appoints the Prime Minister, who must be approved by a confidence vote in the Parliament. The President also appoints the head of the Council of Ministers. Cabinet ministers are nominated by the executive branch and approved by the House of Representatives. Furthermore, the President can dissolve the Assembly and rule by decree.
In 2019 the Parliament voted to remove the limit of two terms for the President, whose term has been extended from four to six years.
Legislative Power
The legislative power is bicameral since the constitutional referendum of 2019 was approved by the House of Representatives in June 2020. It established an upper chamber called the Senate, composed of 300 seats (100 members directly elected in single seat constituencies, 100 directly elected by closed party-list vote, and 100 appointed by the president). The House of Representatives is composed of 596 members, of which 568 directly elected for a period of 5 years by universal suffrage and 28 appointed. The President may dissolve the House of Representatives.
 

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