The International Monetary Fund expects the growth rates of the Egyptian economy to reach 4.5% for the years 2024 and 2025, driven by huge investments in infrastructure and the energy sector.
In its latest report on the economic outlook for the Middle East and Central Asia region, the IMF explained that economic growth in Egypt depends largely on huge investments in infrastructure and energy, which are vital factors for driving economic activity, as the government has engaged in huge projects including transportation, housing, and basic services with the aim of developing infrastructure, providing new jobs, and boosting investment.
Among these projects is the New Administrative Capital project and other urban expansion projects that have contributed to the boom in the construction sector, which in turn enhances other sectors such as trade, industry, and tourism, creating a multiplier effect that enhances economic growth in general.
The energy sector, especially natural gas, represents another pillar of the Egyptian economy, as the country seeks to become a regional energy hub through discoveries such as the Zohr gas field. These efforts contribute to reducing Egypt’s dependence on energy imports, attracting foreign investment, and generating hard currency revenues. The Fund believes that the energy sector, along with infrastructure projects, will be pivotal to achieving the expected growth over the next two years.
The Fund noted that the Central Bank of Egypt has taken several measures aimed at reducing inflation, by adjusting interest rates to manage demand and stabilize the currency. The Central Bank has set two ambitious targets to reduce inflation, the first by 7% in the short term and 5% in the medium term. The report confirms that controlling inflation will be essential for sustainable growth.
The IMF report stressed the importance of efforts to control public finances and structural reforms to stabilize the Egyptian economy, stressing that the government has implemented a set of measures aimed at reducing public debt, enhancing revenue collection, and reducing unnecessary expenditures. Egypt has also introduced a series of tax reforms aimed at expanding the tax base, increasing efficiency, and enhancing a sustainable financial environment.
The IMF commended these measures, stressing that they are vital steps towards improving public finance management, which is essential to ensuring the sustainability of public finances. The IMF report also indicated that the Egyptian government has made progress in creating job opportunities through large-scale projects.
