BMI Research lowers Egyptian household spending expectations for 2025

Egypt’s real household spending will increase by 3.1 percent year-on-year (YoY) in 2025, reaching LE 2.1 trillion, slowing from the previously predicted 7.5 percent for 2024 on the back of increased government spending on subsidies, according to the latest forecast by Fitch’s research arm BMI.

The 4.4 percentage point decrease attributed to the diminishing impact of the nearly 50 percent YoY increase in subsidies and social safety nets in the current fiscal year’s budget, which previously helped boost consumer spending.

Looking further ahead, BMI expects household spending growth to stabilize, with an average annual increase of 4.4 percent YoY, which will bring total spending to LE 2.4 trillion by 2028.

When excluding inflation, nominal household spending is expected to rise by nearly 21.5 percent in 2025, reaching LE 14.7 trillion, according to BMI’s report. This growth will continue at an average rate of 18.5 percent YoY, reaching LE 20.8 trillion by 2028.

BMI highlighted that food and beverage spending will see a significant jump in 2025 due to price inflation in this sector. Spending on food and beverages, which is expected to make up a large portion of consumer spending, is projected to grow by 22.3 percent YoY to LE 5.2 trillion, up from an 8.2 percent growth rate in 2022.

Despite this, recent data shows food inflation is slowing, with food and beverage prices dropping for six consecutive months, and December 2024 showing a 20.3 percent YoY increase, down from 31.9 percent in June. Monthly, food prices decreased by 1.5 percent in December, marking the second consecutive month of price drops after a 1.9 percent fall in November.

Spending on clothing and footwear is expected to grow as well, but at a slower pace, reaching LE 819.6 billion by the end of 2025, with a 20.1 percent YoY increase — down from 34.9 percent in 2024.

BMI attributes this slowdown to limited real gains in disposable income in 2024 and rising import costs, which are pushing consumers toward locally produced apparel.