Egypt entered January under intense balance-of-payment pressure, carrying the weight of mounting financial strains from the previous year. High inflation, tight credit conditions and a shift towards cutting back on spending threatened to constrain economic growth in 2025. At the mid-year mark, Egypt’s economy is gaining momentum, fueled by robust gross domestic product (GDP) growth, a surge in private investment and a thriving tourism sector.

Egypt’s real GDP growth rate reached 4.77% in the third quarter of FY2024/2025, which ended in June. This is the highest quarterly rate in three years and surpasses previous forecasts. The Egyptian government is targeting a 4.5% growth rate for the 2025/2026 fiscal year, according to the Economic and Social Development Plan approved by parliament, per a Ministry of Planning, Economic Development & International Cooperation report.

Private investment in Egypt is playing an increasingly important role in improving the country’s economy. Between May 2022 and December 2024, the Egyptian government implemented nearly 500 reform measures designed to strengthen the private sector’s role in driving national economic growth.

“The reforms target obstacles to private sector participation, aiming to increase its GDP contribution, generate employment, attract investment and boost exports, aligning with Egypt’s State Ownership Policy Document strategic shift towards private sector-led growth,” reads a Daily News Egypt article.

The expected recovery of Suez Canal traffic, a key revenue source, offers further hope for Egypt’s improved economic performance in the coming months. According to CNBC Africa, Egypt’s Vision 2030, with its focus on economic reforms and strategic investments, is expected to continue driving economic growth and development in the country.

A recent surge in tourism has improved Egypt’s economic standing. In 2025, international visitor spending is projected to increase to 768.2 billion EGP, and domestic spending is expected to reach 460.6 billion EGP, per the World Travel & Tourism Council. If this continues, it will contribute to the country’s positive trajectory and sustained demand across both international and local travel.

Despite substantial growth, Egypt’s inflation rate rose slightly to 13.9% in April but remains on a downward trend, according to the International Monetary Fund (IMF). “The current account remains wide, as rising imports, reduced hydrocarbon output and Suez Canal disruptions offset strong tourism, remittances and non-oil exports,” the IMF report reads. “Greater fiscal prudence, including through better oversight and control over large public sector infrastructure projects, is helping to contain demand pressures, with total public investment spending remaining below the established ceiling for July, December 2024.”

Although customers in Egypt averaged just five days beyond terms in May, a notable improvement from 31 days in November, payment delays overall have significantly increased, according to the latest FCIB Credit and Collections Survey. Despite the shorter average delay, all credit professionals surveyed said payment delays are increasing, up from November, when 67% said delays had stayed the same, and 33% reported they were decreasing.

Previously, the most common causes for payment delays in Egypt were central bank issues (100%) and cultural norms and customs (67%). In May, those same challenges remain, but other factors were also cited by all respondents: unwillingness to pay, supply chain and shipping issues, other disputes, customer payment policy, cash flow issues and billing disputes.

To manage risk, survey respondents recommend obtaining localized customer data. “Egypt is not required to share as much insight as other countries,” noted one respondent. Another said, “​tariffs and supply chain issues have had an effect.”

The bottom line: Egypt’s economy is showing strong signs of recovery, driven by robust GDP growth, a resurgence in private investment and booming tourism. Yet, credit professionals report growing concerns over rising payment delays and persistent structural challenges. As the country continues to push forward with reforms, success will depend on maintaining economic momentum while addressing financial transparency and payment reliability.