Egypt’s economy is expected to grow at a faster pace over the next two years, driven by easing monetary conditions and rising investment activity, according to the Arab Monetary Fund (AMF).

In its newly released Arab Economic Outlook Report 2025, the AMF forecasts Egypt’s GDP will expand by 4.2% in 2025 and climb to 4.7% in 2026.

The Fund attributes this momentum to recent economic reforms, including Egypt’s 2024 shift from a fixed exchange rate to a market-determined currency regime—a move that has helped stabilize external finances and attract foreign capital.

The report highlights Egypt’s economic resilience amid ongoing global uncertainty and regional tensions.

The country’s diversified exports and robust services sector, alongside continued financial support from Gulf states and Western partners, have all contributed to sustaining its recovery path.

Inflation, which spiked to 35.4% in 2023 following a series of currency devaluations, is projected to decline to 17.9% in 2025 and further to 11.9% in 2026.

The AMF credits the Central Bank of Egypt’s efforts in managing inflation and the gradual strengthening of the Egyptian pound, alongside easing global commodity prices, for the improved outlook.

The report also points to inflationary pressures in 2023 and early 2024 that were exacerbated by the pound’s weakness and the country’s reliance on imports. However, by 2024, inflation had eased significantly, setting the stage for continued moderation.

At the regional level, the AMF projects economic growth across Arab countries to reach 3.8% in 2025, up from 2.2% in 2024, supported by macroeconomic reforms and increasing demand. Over the medium term, growth across the region is expected to rise to around 4.3%.

The AMF’s projections reflect cautious optimism, underpinned by structural adjustments and efforts to boost investment and stability in Egypt and the wider Arab world.