Egypt ended 2025 with renewed international confidence after the International Monetary Fund approved the fifth and sixth reviews of its economic reform programme, a move that unlocks $2.5bn in fresh financing and underscores tangible progress after a turbulent adjustment phase.
Finance minister Ahmed Kouchouk said Egypt had exceeded around 90 percent of key IMF targets, including those related to the primary fiscal surplus, tax revenues, debt management and social protection. Twelve of the 14 structural reforms under the programme have been completed, spanning energy efficiency, tax and customs administration, fiscal transparency and expanded social safety nets.
The IMF’s assessment points to a clear improvement in macroeconomic conditions. Economic growth rebounded to 4.4 percent in FY 2024/25, up from 2.4 per cent a year earlier, driven by non-oil manufacturing, transport, finance and tourism, before accelerating further to 5.3 percent year on year in the first quarter of FY 2025/26. External balances strengthened as the current account deficit narrowed, supported by strong remittances, tourism receipts and rising non-oil exports, while foreign reserves climbed to $56.9bn.
Fiscal discipline has remained a central anchor. Egypt posted a primary surplus of 3.5 percent of GDP in FY 2024/25, with tax revenues surging more than 30 percent following reforms that broadened the base and improved compliance. The Central Bank of Egypt has maintained a cautious monetary stance, helping inflation retreat sharply from earlier peaks, even as gradual easing supports recovery.
Prime minister Moustafa Madbouly has framed the progress as a transition from crisis management to consolidation. For 2026, the government is targeting higher primary surpluses, further tax reform, accelerated exports and deeper private-sector participation, while continuing to expand social programmes such as Takaful and Karama to cushion vulnerable households.
The IMF cautioned that challenges remain — including the still-modest tax-to-GDP ratio and the need to curb the state’s footprint in the economy — but said stabilisation gains provide a platform for a more competitive, private-sector-led growth model.
For investors, the signal is increasingly clear: after a difficult reset, Egypt enters 2026 with firmer macroeconomic foundations, improved policy credibility and a reform agenda that is beginning to translate into growth.
