Gulf investments flood into Egypt's economy amidst global economic chaos, as per Standard Chartered's report
Egypt's Economy Shows Resilience Amidst Global Headwinds
Egypt's economy is expected to remain resilient in the second half of 2025, according to a report by Standard Chartered's Global Focus - Economic Outlook H2-2025. This resilience is attributed to major foreign investment commitments, intensified IMF-backed structural reforms, and promising growth prospects.
Major Foreign Investments
The country has secured significant foreign investment pledges totaling $12.5 billion from Gulf partners Qatar and Kuwait. At least 50% of these investments are anticipated to be disbursed by the end of 2025, providing robust foreign exchange inflows to the Egyptian economy.
IMF Structural Reforms
The International Monetary Fund (IMF) is expected to emphasize tighter fiscal policies and accelerated privatization efforts to complement these capital inflows. These reforms are aimed at fostering sustainable medium-term growth and enhancing economic stability.
Growth Prospects
The bank maintains its gross domestic product growth forecast for the financial year of 2026 at 4.5 percent. This growth is driven mainly by private sector investment, which is expected to play a central role in the economic recovery.
Macroeconomic Stability
The Egyptian pound is supported by portfolio investments, official financing, and successful foreign exchange convertibility trials. This macroeconomic stability is evident despite global economic headwinds and regional tensions that had caused a sharp decline in Suez Canal receipts.
Current Account Deficit
The current account deficit is expected to narrow, aided by surging remittances and a recovering export sector. Mohammed Gad, CEO of Standard Chartered, Egypt, shares this expectation.
Strategic Advantages
Egypt's strategic location as a regional trade hub, coupled with large-scale infrastructure projects such as the Suez Canal Economic Zone, further enhances its appeal to investors.
The Middle East, North Africa, Afghanistan, and Pakistan region is forecast to grow at 3.4 percent, while Asia continues to lead global expansion with a forecast of 4.9 percent. However, inflation remains elevated in Egypt, averaging 11 percent in the next financial year, driven by cost pressures in health care, food, and transport. The Central Bank of Egypt (CBE) is expected to proceed cautiously with rate cuts, given the high inflation rates.
Despite these challenges, Egypt's proactive reforms and investment inflows position it as a standout performer in an uncertain global landscape. The country's ability to attract foreign investment reflects growing confidence in its reform agenda. Global growth is expected to moderate slightly in 2025, with Standard Chartered revising its forecast down to 3.1 percent. However, Egypt's economy is showing resilience amidst these global headwinds.
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- Egypt's resilient economy in the second half of 2025 is attributed to significant foreign investment commitments, worth $12.5 billion from Qatar and Kuwait, with 50% expected to be disbursed by year-end.
- The International Monetary Fund (IMF) is expected to promote tighter fiscal policies and accelerated privatization efforts to complement these capital inflows, aiming for sustainable medium-term growth and economic stability.
- Private sector investment is expected to play a central role in the economic recovery, maintaining the bank's gross domestic product growth forecast for the financial year of 2026 at 4.5 percent.
- The Egyptian pound is supported by portfolio investments, official financing, and successful foreign exchange convertibility trials, demonstrating macroeconomic stability despite global economic headwinds and regional tensions.
- The current account deficit is anticipated to narrow due to surging remittances and a recovering export sector, as shared by Mohammed Gad, CEO of Standard Chartered, Egypt.
- Egypt's strategic location as a regional trade hub and large-scale infrastructure projects, such as the Suez Canal Economic Zone, further boost its appeal to investors, positioning it as a standout performer amidst an uncertain global landscape.
