Egypt: Economic and Political Overview
For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
The Egyptian economy was one of the most resilient during the COVID-19 pandemic and continued growing in fiscal years 2020 and 2021. The positive trend accelerated in 2022 when GDP was estimated to have grown by 6.6% thanks to buoyant household consumption (85% of GDP), increased investment (particularly in infrastructure) and continued support from international funding. For 2023, the IMF forecasts growth at 4.4% of GDP amid an increase in natural gas production and favourable world prices, followed by a further acceleration in 2024 (5.2%).
In recent years, Egypt implemented an economic reform program comprising fiscal consolidation measures, the introduction of a floating exchange rate and large cuts in subsidies. In FY 2021/22, the budget deficit decreased to 6.1% of GDP (from 7.2% one year earlier) thanks to an uptick of 7.9% of GDP in collected revenues (up by EGP 89.2 billion, to EGP 588.8 billion) led by higher energy royalties. Over the forecast horizon, the IMF forecasts a budget deficit increase, to 7.3% of GDP this year and 7.4% in 2024. The public debt-to-GDP ratio should also increase, from 89.2% in 2022 to 85.6% in 2023; although the share in the hands of external lenders only accounts for around one-third of GDP, the public debt’s non-resident and foreign currency portions are expected to increase with international financing (Coface). The inflation rate ballooned in 2022 reaching 8.5%, with the state-run Central Agency for Public Mobilization and Statistics reporting a consumer price inflation rate of 21.9% in December alone. This was due to the global crisis triggered by the Russia-Ukraine conflict and to the devaluation of the Egyptian pound, that as of January 2023 had lost half of its value compared to the beginning of the conflict, as the central bank moved to a more flexible exchange rate under the terms of an IMF financial support package. The authorities are committed to pursue a structural reform program that aims at more inclusive and sustainable private sector-led growth, durable job creation and improved external resilience (IMF). The country’s growth path will be guided by the Egypt Vision 2030 strategy, which comprises numerous programs related to transport, entrepreneurship, logistics, environment, etc. (Oxford Business Group). Nevertheless, Russia’s invasion of Ukraine triggered capital outflows, and, in the context of a still-stabilized exchange rate, reduced the central bank’s foreign reserves and banks’ net foreign assets, widening the exchange rate misalignment (IMF).
The unemployment rate stood at 7.4%, according to the Central Agency for Public Mobilization and Statistics (CAPMAS), with female unemployment being around four times higher than for males. 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).
| Main Indicators | 2020 | 2021 | 2022 (E) | 2023 (E) | 2024 (E) |
| GDP (billions USD) | 382.53 | 423.30 | 475.23 | 387.11 | 368.31 |
| GDP (Constant Prices, Annual % Change) | 3.5 | 3.3 | 6.6 | 3.7 | 5.0 |
| GDP per Capita (USD) | 3,802 | 4,146 | 4,563 | 3,644 | 3,399 |
| General Government Balance (in % of GDP) | -6.6 | -7.1 | -6.0 | -7.7 | -9.2 |
| General Government Gross Debt (in % of GDP) | 86.2 | 89.9 | 88.5 | 92.9 | 87.0 |
| Inflation Rate (%) | 5.7 | 4.5 | 8.5 | 21.6 | 18.0 |
| Unemployment Rate (% of the Labour Force) | 8.3 | 7.3 | 7.3 | 7.6 | 7.7 |
| Current Account (billions USD) | -11.17 | -18.44 | -16.55 | -10.90 | -11.56 |
| Current Account (in % of GDP) | -2.9 | -4.4 | -3.5 | -2.8 | -3.1 |
Source: IMF – World Economic Outlook Database, October 2021
Agriculture contributes 11.8% of the GDP and employs 21% 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. According to the latest official governmental figures, Egypt's agricultural exports exceeded 6.3 million tons in 2022, marking a fresh record high, with an increase of more than 624,000 tons from 2021. The country has 3.9 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.
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 30.8% of the GDP and employs 27% of the workforce (World Bank). Overall, the manufacturing sector alone accounts for 15% of GDP, whereas the mining industry accounts for only 0.5%, 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 (Oxford Business Group). In spite of economic diversification efforts, the country continues to depend on the Suez Canal for a large part of its foreign income. The total production of all petroleum products in Egypt reached 79.50 million tonnes in 2022, and in the same year 42 oil wells and 11 gas wells were discovered, according to a report by the country’s Ministry of Petroleum and Mineral Resources.
Finally, the services sector represents 52.2% of the Egyptian GDP and employs more than half of the population (52%). It is largely dominated by revenues from the telecommunications and tourism sectors. Figures from the Central Bank show that over the nine months from July 2021 to March 2022, Egypt's tourism revenue rose by USD 5.1 billion to USD 8.2 billion over the corresponding period in the previous year (when COVID-19-related restrictions were still in place). Egypt’s digital services exports hit USD 4.9 billion in 2022, reaching 5% of GDP (Ministry of Communications and Information Technology).
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 20.6 | 26.9 | 52.4 |
| Value Added (in % of GDP) | 11.8 | 30.8 | 52.2 |
| Value Added (Annual % Change) | 3.8 | -1.1 | 3.5 |
Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.
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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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Latest Update: September 2023
