Macroeconomic Analysis of Egypt

Egypt’s near-term economic growth will be dampened by the ongoing fallout from the Russia/Ukraine conflict, namely due to elevated food and energy imports that are pushing up inflation and weighing on domestic demand. For instance, the current account deficit is expected to widen to 17.0% of GDP in 2022 compared to an average of 11.2% over the previous ten years, while inflation in the country is forecast to end 2022 at a four-year high of 13.1%. These pressures are reflected in high-frequency leading indicators for the country, including the stock market, interest rates and manufacturing surveys.

In the longer term, Egypt is expected to be one of the fastest-growing economies in Africa over the coming years. The IMF forecasts real GDP growth at 5.4% over 2023–2027, compared to 4.6% in Africa as a whole. Egypt offers a wealth of opportunities for investors, given its robust long-term macroeconomic fundamentals, diverse industrial base, large consumer market and strategic location between Africa, Asia and Europe.