Economic Overview
For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
The Egyptian economy was one of the most resilient during the COVID-19 pandemic and continued growing in fiscal years 2020 and 2021. The positive trend accelerated in 2022 when GDP was estimated to have grown by 6.6% thanks to buoyant household consumption (85% of GDP), increased investment (particularly in infrastructure) and continued support from international funding. For 2023, the IMF forecasts growth at 4.4% of GDP amid an increase in natural gas production and favourable world prices, followed by a further acceleration in 2024 (5.2%).
In recent years, Egypt implemented an economic reform program comprising fiscal consolidation measures, the introduction of a floating exchange rate and large cuts in subsidies. In FY 2021/22, the budget deficit decreased to 6.1% of GDP (from 7.2% one year earlier) thanks to an uptick of 7.9% of GDP in collected revenues (up by EGP 89.2 billion, to EGP 588.8 billion) led by higher energy royalties. Over the forecast horizon, the IMF forecasts a budget deficit increase, to 7.3% of GDP this year and 7.4% in 2024. The public debt-to-GDP ratio should also increase, from 89.2% in 2022 to 85.6% in 2023; although the share in the hands of external lenders only accounts for around one-third of GDP, the public debt’s non-resident and foreign currency portions are expected to increase with international financing (Coface). The inflation rate ballooned in 2022 reaching 8.5%, with the state-run Central Agency for Public Mobilization and Statistics reporting a consumer price inflation rate of 21.9% in December alone. This was due to the global crisis triggered by the Russia-Ukraine conflict and to the devaluation of the Egyptian pound, that as of January 2023 had lost half of its value compared to the beginning of the conflict, as the central bank moved to a more flexible exchange rate under the terms of an IMF financial support package. The authorities are committed to pursue a structural reform program that aims at more inclusive and sustainable private sector-led growth, durable job creation and improved external resilience (IMF). The country’s growth path will be guided by the Egypt Vision 2030 strategy, which comprises numerous programs related to transport, entrepreneurship, logistics, environment, etc. (Oxford Business Group). Nevertheless, Russia’s invasion of Ukraine triggered capital outflows, and, in the context of a still-stabilized exchange rate, reduced the central bank’s foreign reserves and banks’ net foreign assets, widening the exchange rate misalignment (IMF).
The unemployment rate stood at 7.4%, according to the Central Agency for Public Mobilization and Statistics (CAPMAS), with female unemployment being around four times higher than for males. 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).
| Main Indicators | 2020 | 2021 | 2022 (E) | 2023 (E) | 2024 (E) |
| GDP (billions USD) | 382.53 | 423.30 | 475.23 | 387.11 | 368.31 |
| GDP (Constant Prices, Annual % Change) | 3.5 | 3.3 | 6.6 | 3.7 | 5.0 |
| GDP per Capita (USD) | 3,802 | 4,146 | 4,563 | 3,644 | 3,399 |
| General Government Balance (in % of GDP) | -6.6 | -7.1 | -6.0 | -7.7 | -9.2 |
| General Government Gross Debt (in % of GDP) | 86.2 | 89.9 | 88.5 | 92.9 | 87.0 |
| Inflation Rate (%) | 5.7 | 4.5 | 8.5 | 21.6 | 18.0 |
| Unemployment Rate (% of the Labour Force) | 8.3 | 7.3 | 7.3 | 7.6 | 7.7 |
| Current Account (billions USD) | -11.17 | -18.44 | -16.55 | -10.90 | -11.56 |
| Current Account (in % of GDP) | -2.9 | -4.4 | -3.5 | -2.8 | -3.1 |
Source: IMF – World Economic Outlook Database , October 2021
Country Risk
See the country risk analysis provided by La Coface.
