Stable growth despite the war

Egypt has been, and continues to be, severely affected by the war in the Middle East. There have been significant supply disruptions, for example with natural gas, which accounts for 80 per cent of electricity generation. The oil and petrochemical industries along the Nile have suffered as a result of the Hormuz blockade; petrol and public transport prices have risen.

However, the economy is proving surprisingly stable. According to a central bank estimate, inflation this year is set to reach up to 17 per cent – significantly higher than expected, but lower than in 2024 and 2025. Furthermore, economists have only slightly revised their growth forecasts and still expect a rate of around 4.5 per cent.

Egypt is benefiting from the fact that it maintains a broad portfolio of trade partnerships around the world. In addition, the ports on the Mediterranean and the Red Sea have gained in importance as a result of the Hormuz blockade, which is providing a further boost to infrastructure projects such as the planned railway line from Saudi Arabia across the Sinai Peninsula to the Mediterranean coast.

The development of infrastructure, through which Egypt aims to strengthen its position as a logistics hub, also offers opportunities for German companies – as do the expansion of renewables and the government’s push to develop local industries. For instance, automotive supplier Leoni plans to double its capacity for manufacturing cable harnesses in Egypt by 2028.

Economy. According to Germany Trade & Invest, Egypt’s economy is expected to grow by 4.5 per cent this year. For 2027, economists predict a growth rate between 4.8 and 5.3 per cent. The gross domestic product per capita rose in the last 20 years from the equivalent of 991 to 3339 US-Dollars. National debt has reached the high level of 87 per cent of GDP.

Population. Egypt has around 120 million inhabitants; the population recently grew at an annual rate of 1.7 per cent. In the last 20 years, the fertilty rate has fallen from 3.3 to 2.7 children per woman. Life expectancy was at 72 years recently (twenty years ago: 68). 100 per cent of the population has access to electricity (twenty years ago: around 99 per cent).

Governance. On Transparency International’s latest Corruption Perceptions Index, Egypt ranks 130th out of 180 countries. The score has fallen by a full 5 points to 30 since 2023, bringing the country on par with Kenya, Mauritania and Peru.

Sources and further information:

World Bank: https://data.worldbank.org/country/egypt-arab-rep

Germany Trade & Invest: https://www.gtai.de/de/trade/aegypten-wirtschaft/wirtschaftsdaten-kompakt#/EGY/wirtschaftslage

Transparency International: https://www.transparency.org/en/cpi/2025/