BNP Paribas Report: Egyptian Economy on Path to Recovery Amid Exchange Rate Stability and Declining Inflation
A recent report by BNP Paribas revealed that the Egyptian economy is on a recovery trajectory, supported by declining inflation and a stable exchange rate, which are expected to enhance growth prospects in the coming year. Despite ongoing structural challenges, the government continues to implement fiscal and monetary reforms aimed at achieving economic sustainability and improving the investment climate.
The bank projects that the Egyptian economy will grow by 4% in 2025, driven by increased investor confidence and stability in the foreign exchange market. The appreciation of the Egyptian pound and the rise in foreign exchange reserves – which reached $46.4 billion in December 2024 – are expected to support financial stability.
BNP Paribas also anticipates a gradual recovery in private investments starting from 2026, while the impact of public investment is expected to diminish in the short term.
The report highlighted that the Egyptian pound strengthened by 5.5% in the second half of 2024, supported by easing pressures on the exchange market and increased financial inflows from regional partners and international institutions. As for inflation, it declined to 24.1% in December 2024 and is expected to continue its downward trend to 18.9% in 2025, reaching 10% by 2026.
This decline in inflation rates creates room for the Central Bank of Egypt to gradually ease its monetary policy after a series of rate hikes that exceeded 1900 basis points since 2022, potentially supporting investment and economic activity.
