Egypt Shows Signs of Economic Recovery

Egypt’s economy has shown signs of stabilization, thanks to large-scale investments and international loans. The IMF, World Bank, and the European Union, alongside Gulf investors like the UAE and Qatar, have injected billions into the economy since early 2024. Recent projects include Gulf-funded developments near el-Alamein and ongoing tourism and infrastructure initiatives.

Credit ratings have improved, inflation has cooled, and the Egyptian pound has stabilized, helping businesses plan imports and exports more effectively. Textile and manufacturing sectors have benefited from lower labor costs, attracting foreign investment, particularly from Turkish companies.

Structural Challenges Remain

Despite these improvements, many Egyptians—especially in rural areas—still face hardship. Non-oil private sector activity has remained weak for years, domestic consumer demand is low, and wages are often insufficient to meet rising costs. Recent IMF-inspired reforms, including the removal of subsidies on fuel and food, have exacerbated economic strain for poorer citizens.

Economists like Osama Diab highlight that much of the foreign investment and loans are being used to repay debts, rather than boost domestic incomes or create lasting employment. The new labor law, while modernizing employment rules and increasing maternity leave, also allows more temporary contracts and reduces guaranteed annual raises, limiting benefits for workers.

Unequal Distribution of Gains

While projects such as the Grand Egyptian Museum generate income for tourism and urban sectors, rural communities continue to struggle. Farmers and small business owners in the Nile Delta and Upper Egypt report that the economic recovery has brought little relief. Rising costs of essentials, coupled with decreased subsidies, have made daily life challenging.

One farmer, Mahmoud, explained:

“The museum is good for Egypt, but mainly for tourism, for hotels, not for all Egyptians. We are looking for subsidies, but nothing is subsidized anymore.”

Political Context

Domestic developments, including parliamentary elections, have attracted limited attention, as pro-government coalitions dominate the race. Critics argue that elections occur under restricted political participation, continuing a trend under President Abdel Fattah el-Sisi.

Outlook

While Egypt’s macroeconomic indicators show improvement—credit rating upgrades, stable currency, growing foreign investment—the benefits remain unequally distributed. Structural issues such as debt dependence, low domestic demand, and rural poverty persist, meaning that for many Egyptians, life remains financially precarious despite headline economic gains.