After one year of rescue at eleven o’clock, Egypt’s economy shines. Reforms are implemented, inflation decreases, and foreign direct investment.
Egypt’s economic expectations light, thanks to the start of long structural reforms, ambitious economic transformation plans, and foreign capital flow. Recovery from the long waves of Covid-19 and the war in Ukraine, the growth is expected to be 4 % in 2025, an increase of 2.4 % in 2024, according to Reuters.
Help political geography. With the presence of 110 million people, the Suez Canal, and the only Arab border with Gaza, it was considered the second largest economy in Africa to fail, which helps it secure a rescue plan at the last minute of international donors in early last year.
The United Arab Emirates (the United Arab Emirates) led the road with an investment of $ 35 billion, including $ 11 billion in the current deposits of the Central Bank of Egypt (CBE), in Ras Hika, a tourism complex on the Mediterranean coast and the largest foreign direct investment (FDI) in Egypt. The International Monetary Fund followed 8 billion dollars, the European Union with another $ 8 billion, and the World Bank with $ 6 billion, reaching a total external support of more than $ 50 billion.
Since then, structural reforms began to unify the budget, reduce the imprint of the public sector, and attract more foreign investments. The most prominent, in March of last year, CBE put the pound to achieve stability in the currency and the closure of the Black Stock Exchange.
“The investment climate is characterized by cautious optimism,” says Ahmed Saal, director of information management at the National Bank of Egypt (NBE), the country’s largest lender. “Despite inflationary pressures, investor morale improves due to clarity in the direction of politics and enhancing external financing. The economic environment shows external financial stability, improving foreign exchange reserves, and gradual normalization of local demand.”
The flotation causes a decrease of about 40 % of the pound. Inflation remained high at 28 % in 2024, a decrease from 33 % in 2023, and is expected to decrease less than 20 % this year.
“In the short term, yes, inflation is still high,” says Salem Masalha, a social businessman who participated in the founding of Basita, the whale, and its whale, all focuses on environmental cleaning, “but in the medium term, it will have a positive impact now. Black markets have been dropped and investors have been able to trust the value of the pound.”
Thanks to the RAS El-HEKMA deal, as well as a series of smaller transactions in multiple sectors, Egypt was the ninth largest beneficiary of foreign direct investment last year, according to United Nations data. This year, Cairo wants to attract another $ 42 billion.
Moderate inflation and low interest rates improve borrowing conditions, according to HISHAM Ezz El Arab, CEO of International Trade Bank (CIB), the largest private bank in Egypt.
“Economic growth on the right path,” says, “with a stronger momentum in the fiscal year 2025-2026 as private investment, Gulf financing, and structural reforms continue. The main sectors such as fast-moving consumer goods, pharmaceutical preparations, tourism, and manufacturing are already expanding.”
The recovery has also prevented some investors from going out. In February, unlike Electrolux, the Swedish housing maker, previous plans to leave Egypt, referring to the strongest local demand and the country’s capabilities as an export center to the Middle East and Africa.
In March, Egypt confirmed CAA1 with positive expectations, pointing to the “credibility and effectiveness of monetary policy” that should “allow policy prices to decline, making more relief on the cost of debt while maintaining a favorable environment for fixed foreign work flows.” S&P Global and Fitch reviewed Egypt’s views of the stable from the positive.
A wide -scale privatization program also advances. Late last year, the Egyptian authorities sold 30 % of United Bank in the first public subscription in the country since 2021. The list of prominent landmarks is expected to pave the way for more.
“The sales of state-owned assets provide capital flows and encourage private sector expansion,” NBE’s El-SAIED notes.
Prime Minister Mostafa Madbouly pledged to include at least 10 companies this year, including Wataniya Petroleum, Safi Waters, Chillout Fuel Station operator, Silo, Gamal Zeit Wind Farms, and the Egyptian Pharmaceutical Industries Group. It remains to see the number of subscriptions that will be achieved by the end of the year.
Foreign investment grows
Like its neighbors in the Gulf Cooperation Council, Egypt has ambitious plans to create growth opportunities across multiple sectors. The leading projects include $ 59 billion for New Cairo Urban Development. At least ten other new cities; The expansion of the Swiz Channel of $ 9 billion; New railways industrial investments in medicines, agriculture and car manufacture; And initiatives adapting to renewable energy and climate.
Last year, Egypt ranked first among the best integration and purchase destinations in the Middle East and North Africa. The activity increased by 27 % on an annual basis in the size of the deal, local and border, although the value of the total deal decreased by 14 %, due significantly to the low value of the currency, according to the international law firm Baker McKenzi. Emirati investors have led foreign acquisitions with 15 deals, followed by the United States with 10 and Saudi Arabia with eight.
Many of the foreign capital that enter Egypt comes from the sovereign wealth funds. The United Arab Emirates is leading the road with multiple constipation in logistical services, tourism, real estate and banking services. In March, the UAE NBD, the largest lender in Dubai, obtained an organizational approval to obtain a stake in Banque du Caire, the sixth largest bank in Egypt. Dubai billionaires in Dubai, Mohamed Alabar, founder of EMAAR Properties, are leading controversial plans to redevelop parts of Central Cairo.
Other Gulf countries want also. In April, the Egyptian presidency announced $ 7.5 billion of investments from Qatar, including a $ 4 billion tourism project in the Mediterranean. The Kingdom of Saudi Arabia has pledged 15 billion dollars, while Kuwait said it could invest up to $ 6.5 billion in Largescale projects.
Egypt is also attracting capital on a smaller scale.
According to the latest project report issued by Magnitt, an investment capital data platform and the private stock data platform, Egypt led Africa in the start of the start of last year. Despite the slowdown of financing, Egyptian startups raised $ 329 million in 78 rounds, with fuse, half, MNT, and securing $ 157.5 million, which is the largest tour in both Africa and Media. This year, the country once again expects to be a regional magnet for the startup investment. In May, Nui, a “Proptech” startup that applies technology on the aspects of the real estate industry, closed a round of $ 75 million while seven other startups raised $ 50 million.
“It is a great thing about opening a company in Egypt is the feeling that it is possible to do new things,” said Masalha. “There are still some barriers, of course, such as heavy bureaucracy and understanding of how the Egyptian regime works. But it is a country that has a lot that must be presented. At the present time, there is not enough of the available capital and most of what we see is the financing of seeds. There is also a need for more capital and investment.
Banks must play a greater role, but this is now developing. If the banks do not find themselves, new players will take over, especially in accurate financing and technology. “
Egyptian banks are ranked first among the largest and most dynamic in the region, pushing the local economic transformation and regional trade. Although the sector needs a digital boost to compete with the Gulf states, most Egyptian lenders have already begun to take advantage of the new technologies to expand the unspeakable financial services.
They also put themselves as regional leaders in sustainability and green financing. In 2021, CIB became the first bank to issue a green bond: offering $ 100 million in partnership with Finance Corporation International.
Understanding
Egypt’s recovery is real, but it is far from complete. The country continues to rely on the lifeline from the friendly Gulf kings and international institutions to maintain its economy standing on its feet. The government’s revenues also rely heavily on three rental sources: transfers from Egyptians who work abroad, tourism and a revenue channel. Once a value of $ 10.3 billion for the monetary machine, the channel witnessed 60 % income last year to 4 billion dollars, such as tensions in the Red Sea and Al -Haith attacks from Yemen, which forced shipping on longer and more expensive roads.
Inflation reduces, but it still represents a threat; Government debt is hovering near 90 % of GDP, and its service swallows more than half of the general spending. The huge projects that have not yet received revenues are absorbed by huge sums, while a third of the Egyptians live below the poverty line and 800,000 new job seekers enter the market every year.
“Inforcement pressures can come back to appearing, geopolitical tensions in the region are continuing, and maintaining the momentum of reform is very important,” Ezz El Al Al Arab notes. “However, the medium -term setting is convincing: If Egypt remains the path, we expect growth and investment flows to deepen and evaluate to re -rate it.”
