Egypt’s full-year unemployment rate fell to its lowest level in at least a decade in 2025, signalling a gradual improvement in labour market conditions, according to BusinessDay’s analysis of data from the Central Agency for Public Mobilization and Statistics (CAPMAS).
The average unemployment rate declined for the fifth consecutive year to 6.25 percent — the lowest since 2016 — from 6.58 percent in 2024. With unemployment at 6.25 percent and inflation averaging 14.2 percent last year, the misery index in Africa’s second biggest economy eased to 20.5 percent from 34.9 percent in 2024.
CAPMAS data also showed that on a quarter-on-quarter basis, the jobless rate fell to 6.2 percent in the fourth quarter from 6.4 percent in the third quarter, a decline of 0.2 percentage points. The number of unemployed people dropped to about 2.15 million from 2.23 million in the previous quarter, representing a reduction of roughly 77,000 individuals.
The figures underscore the country’s gradual labour market recovery, although the high share of educated unemployed workers highlights persistent mismatches between labour supply and job creation.
Male unemployment eased to 3.8 percent from four percent in the prior quarter. Female unemployment also improved notably, declining to 14.3 percent from 15 percent in the third quarter and 16.6 percent a year earlier — pointing to steady progress in women’s employment outcomes.
Urban areas continued to record higher joblessness, with unemployment at 9.7 percent, though this improved from 10.1 percent in the previous quarter. Rural unemployment declined further to 3.4 percent, reflecting strengthening labour conditions outside major cities.
Despite the quarterly improvement, unemployment rose slightly on an annual basis, increasing by about 22,000 individuals compared with the same period in 2024.
Education levels among the unemployed remain elevated, underscoring structural labour market challenges. About 82.1 percent of unemployed persons hold intermediate, advanced or university qualifications, with university graduates alone accounting for 45 percent of the jobless population.
Policy easing gathers pace
Earlier in the month, the country’s central bank last we lowered key interest rates by 100 basis points, taking borrowing costs to their lowest level since July 2023 as inflation cools and the pound stabilises.
The move marked a second consecutive rate cut and was broadly in line with analyst expectations, though Goldman Sachs had projected a deeper 150-basis-point reduction. The Central Bank of Egypt’s main policy rates now stand at 29 percent for overnight deposits, 20 percent for overnight lending and 19.5 percent for the main operation.
Policymakers are increasingly focused on easing financial conditions to support growth, stimulate private-sector investment and relieve pressure on households and businesses after an extended tightening cycle.
Egypt had previously raised rates to record highs alongside a roughly 40 percent currency devaluation in early 2024, part of efforts to secure a $57 billion global support package and resolve a foreign-exchange shortage. Authorities subsequently delivered cumulative cuts of about 725 basis points across five meetings last year.
Cooling inflation has created room for further easing. After peaking at a record 38 percent in September 2023, annual headline inflation slowed sharply through 2024 and stood at 11.9 percent in January — the lowest reading in four months. Meanwhile, the Egyptian pound strengthened to around 46.83 per dollar on Thursday, its firmest level since May 2024.
The International Monetary Fund, which supports Egypt under an expanded $8 billion programme, this week praised the country’s monetary and exchange-rate reforms, citing progress toward inflation targeting and macroeconomic stabilisation.
