Egypt’s Economic Stabilisation Masks Persistent Poverty and Political Constraints

Egypt’s Economy Shows Signs Of Stabilisation — But Many Still Struggle

In the second half of this year Egypt returned to the international spotlight, hosting the Sharm el-Sheikh conference in October and the high-profile opening of the Grand Egyptian Museum near the pyramids in November. Those events were accompanied by domestic developments that drew less attention, notably parliamentary elections that began with a first round in November and runoffs scheduled for early December.

Political Context

Half of the parliamentary seats were allocated to party lists won largely by a coalition of pro-government parties running effectively unopposed. Individual candidates competed for the remaining seats, but critics say those contests favour those with substantial financial resources and political connections. A coalition of Egyptian human rights groups said the vote took place under chronic and severe restrictions on meaningful political participation, and many Egyptians displayed limited interest in the ballot.

An anonymous textile-business owner summarized the public mood: fewer banners and less excitement than in past elections, and a general sense that the outcome is already shaped.

Macroeconomic Stabilisation

After a near-crisis less than two years ago, a wave of capital injections and investment pledges helped stabilise Egypt’s macroeconomy. Key support included financing and programme reviews from the International Monetary Fund (IMF), plus funds and commitments from the World Bank, the European Union and Gulf partners. The IMF completed its fourth review of an $8 billion programme this year and released an additional $1.2 billion; Egypt has withdrawn about $3.2 billion from the facility so far.

On paper the indicators look better: the pound has stabilised after a major 2024 devaluation, dollar liquidity in banks has improved, the country received a credit-rating upgrade, GDP growth is rising and inflation has eased from previous peaks. Gulf investors continue to back large projects, with Qatar and the UAE planning or building major coastal developments near el-Alamein.

Effects On Business And Workers

Business owners and factory managers report tangible benefits from greater foreign-currency availability and a predictable exchange rate. Mohamed Usama, an engineer at a steel-products facility, said imports and exports have become more reliable and order lead times have shortened, allowing some rehiring.

For labour-intensive sectors the 2024 devaluation made wages cheaper in foreign-currency terms, attracting foreign manufacturers and prompting local firms to raise pay to retain staff. Yet when measured against foreign currencies, many wages remain below pre-devaluation levels and domestic purchasing power has not recovered for large parts of the population.

Structural Limits And Social Strain

Experts warn that international loans and investment mainly address symptoms rather than long-term structural problems. Osama Diab, a political economist at KU Leuven, said the economy still depends on high interest rates to attract hard currency and suffers from persistent current-account imbalances. He added that much of the inflow is used to service debt rather than to fund broad-based job creation.

Non-oil private-sector activity has remained in contraction for much of the past five years, reflecting weak domestic consumer demand. Meanwhile, households face new price pressures: fuel prices rose in November and electricity and cooking-gas tariffs are scheduled to increase early next year. The government also enacted a labour law that reduces mandatory annual raises for many workers and expands employers' ability to use temporary contracts, while extending some benefits such as paid maternity leave.

Rural Reality

Rural communities remain especially vulnerable. Smallholders and agricultural labourers in the Nile Delta and Upper Egypt continue to report high poverty and feel little benefit from urban tourism booms or grand cultural projects. One farmer told reporters that museum-driven tourism generates income in Cairo but does not reach villages where people struggle to afford basic goods after subsidy cuts tied to reforms.

Conclusion

Egypt’s recent macroeconomic stabilisation is real and visible in trade flows, currency stability and renewed foreign investment. But the recovery has not yet translated into broad-based improvements for many citizens. Structural vulnerabilities, heavy debt-servicing needs, constrained political space and rising living costs mean millions still face economic hardship despite headline indicators that have improved.