IMF and Moody's Praise Egyptian Economic Reforms: Growth Accelerates to 5.3% and Credit Worthiness Strengthens

Cairo – EcoPulse24

In a clear reflection of the success of Egyptian economic reforms, the International Monetary Fund (IMF) reached a staff-level agreement with Egypt regarding the fifth and sixth reviews of the Extended Fund Facility program, while Moody's credit rating agency confirmed improved Egyptian economy creditworthiness, in simultaneous developments reflecting growing confidence from international financial institutions in the Egyptian economy 2025.

International Praise for Egyptian Economic Performance

Ivanna Vladkova Hollar, head of the IMF mission to Cairo, praised the tangible progress made by the Egyptian government toward achieving macroeconomic stability in Egypt, confirming that the Egyptian economy shows strong growth indicators despite regional security challenges and global uncertainty.

In the same context, Moody's confirmed that recent developments in the Egyptian economy indicate improved credit rating for Egypt, consistent with the agency's positive outlook, in light of economic growth recovery and improved fiscal and external conditions.

Egyptian Economic Growth Accelerates to Record Levels

The two international institutions revealed a remarkable acceleration of Egyptian economic growth, where Egypt's GDP growth rate rose from 2.4% in fiscal year 2023/2024 to 4.4% in fiscal year 2024/2025, jumping further to 5.3% in the first quarter of fiscal year 2025/2026.

Moody's explained that the Egyptian economic recovery was driven by strong real growth engines, particularly the non-oil manufacturing sector and Egyptian tourism, while the IMF noted that the recovery was broad-based, also supported by strong performance in transportation and financial services sectors.

Structural Reforms Reshape the Economy

The IMF highlighted ongoing reforms implemented by the Egyptian government, which included exchange rate liberalization in Egyptian reforms, enhanced fiscal discipline, and rationalized subsidy systems, noting that the success of economic policies in Egypt received clear welcome from the private sector.

For its part, Moody's indicated that the shift in economic policies toward exchange rate flexibility and inflation targeting in Egypt 2025 contributes to reducing external imbalance risks and enhances the Egyptian economy's ability to absorb external shocks.

Record Growth in Egyptian Tax Revenues

Egyptian fiscal performance recorded strong results, achieving a primary balance surplus of 3.5% of GDP in fiscal year 2024/2025, according to the International Monetary Fund.

In a remarkable achievement, Egyptian tax revenues grew by 36% in fiscal year 2024/2025, continuing its momentum at 35% during July to November 2025/2026, through tax reforms in Egypt that included broadening the tax base and improving voluntary tax compliance.

Moody's expected that domestic borrowing costs and interest payments will begin to decline in the coming period, supported by continued fiscal consolidation, declining inflation rates, enhanced central bank credibility, and diversified domestic financing sources.

Historic Jump in Foreign Exchange Reserves

The Egyptian balance of payments witnessed remarkable improvement despite negative external developments, with the current account deficit narrowing significantly, supported by strong Egyptian workers' remittances and tourism revenues, alongside Egyptian non-oil exports recording strong growth.

In a positive development, external financial conditions improved significantly during 2025, with non-resident investments in Egyptian bonds rising to approximately $30 billion, while Egypt's foreign exchange reserves reached $56.9 billion, according to IMF data.

IMF Loan: $2.7 Billion in New Financing

The Egypt-IMF agreement December 2025 opens the door for Egypt to receive an IMF loan tranche worth $2.7 billion under the Egypt Extended Fund Facility program, in addition to $274 million as the first installment of the Resilience and Sustainability Facility program.

The agreement requires approval from the IMF Executive Board before disbursing the financial tranches. The Fund's mission visited Cairo from December 1-11, 2025, followed by fruitful virtual discussions on a package of economic and fiscal policies.

World Bank Raises Egypt Forecasts

For its part, the World Bank raised Egypt's forecasts for economic growth during the current fiscal year 2025/2026 to 4.3%, compared to its previous estimates, and raised growth forecasts for fiscal year 2026/2027 to 4.8%, reflecting continued positive momentum in Egyptian economic indicators.

Recent developments indicate that investment in the Egyptian economy has become more attractive, with Egypt succeeding in building a more solid and sustainable economic foundation, enhancing international confidence in the Egyptian economy in the coming period.