Egyptian economy shows resilience amid global pressures: Standard Chartered

Updated 8/10/2025 12:03:00 PM

Arab Finance: Standard Chartered Bank expects the Egyptian economy to maintain resilience and macroeconomic stability in the face of global challenges, according to its latest report 'Global Market Outlook H2 2025'.

The bank said Egypt’s outlook is supported by strong foreign exchange inflows from portfolio investments and official sectors, boosting confidence in the Egyptian pound.

It added that over 50% of major investment pledges from Qatar and Kuwait, totaling $12.5 billion, are anticipated to be disbursed by year-end.

Despite the Central Bank of Egypt’s (CBE) continued monetary easing to stimulate growth, the carry trade remains a key draw for investors, aided by the successful implementation of the foreign exchange convertibility test.

The report noted that the International Monetary Fund is expected to shift its focus toward advancing structural reforms in Egypt, calling for tighter fiscal policies and an acceleration of privatization efforts to stimulate investment flows.

Standard Chartered forecasts gross domestic product (GDP) growth of 4.5% in fiscal year (FY) 2025/2026, underscoring the importance of private investment in driving economic recovery.

“The Egyptian economy continues to progress on a promising path, and we expect the current account deficit to narrow, supported by increased remittances from Egyptians working abroad, which jumped by nearly 60% year-on-year in March, in addition to a recovery in the export sector,” said Mohamed Gad, CEO of Standard Chartered Bank Egypt.

Inflation is expected to stabilize between 13% and 17%, with the CBE likely to adopt a cautious approach to interest rate cuts, targeting 19.25% by the end of 2025.

For FY 2025/2026, inflation is projected to average around 11%, with cost pressures persisting in healthcare, food, and transportation.

The bank said proactive policy measures should help Egypt navigate these challenges and strengthen long-term economic resilience.

Globally, Standard Chartered lowered its 2025 growth forecast to 3.1%, from the previous 3.2%, citing rising trade policy uncertainty.

The bank said Middle East growth could benefit from the easing of OPEC+ production cuts and diversification efforts, while Sub-Saharan Africa is expected to grow 4.1%, supported by lower exposure to trade volatility but requiring structural reforms.