Egypt: Economic and Political Overview
In this page: Economic Outline | Political Outline
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) | 393.83 | 380.04 | 345.87 | 387.24 | 431.16 |
| GDP (Constant Prices, Annual % Change) | 3.8 | 2.7 | 3.6 | 4.1 | 5.2 |
| GDP per Capita (USD) | 3,744 | 3,542 | 3,160 | 3,469 | 3,786 |
| General Government Balance (in % of GDP) | -5.7 | -6.6 | -9.1 | -7.5 | -5.1 |
| General Government Gross Debt (in % of GDP) | 95.9 | 90.9 | 84.5 | 79.1 | 73.9 |
| Inflation Rate (%) | 24.4 | 33.3 | 21.2 | 14.4 | 10.4 |
| Unemployment Rate (% of the Labour Force) | 7.2 | 7.2 | 7.4 | 6.9 | 6.4 |
| 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, Latest data available.
Note : (E) Estimated data
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 data available.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024
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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:
Other parties include
The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House
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