A resurgent tourism sector is helping drive economic recovery across the Middle East and North Africa (MENA), according to the International Monetary Fund (IMF), which raised its 2025 growth outlook for the region from 2.6% in May to 3.3% this October.
While geopolitical risks and global uncertainty remain, a rebound in tourism — along with stronger remittances and lower inflation — has created upward momentum, especially for oil-importing economies like Egypt.
“Tourism is proving to be a key pillar of recovery for several MENA economies in 2025,” said Jihad Azour, Director of the IMF’s Middle East and Central Asia Department, in a statement during the IMF’s Regional Economic Outlook briefing in Dubai.
Egypt: Tourism and Remittances Drive Growth
The IMF revised Egypt’s GDP growth forecast to 4.3% in 2025, up from 3.8% projected in May, driven by a surge in tourism revenues and robust remittance inflows from Egyptians working abroad.
This growth comes despite earlier economic challenges, including sky-high inflation, which spiked to nearly 40% in 2023. The country’s inflation rate has since dropped to 11.7% by September 2025, following an $8 billion IMF bailout in March 2024 and a series of structural reforms.
“Egypt’s tourism sector has bounced back strongly, supported by improved macroeconomic conditions and increased foreign interest,” Azour noted.
The IMF emphasized the importance of continuing structural reforms, including privatization of state-owned enterprises, to sustain this recovery and attract long-term investment.
Tourism Supporting Broader MENA Recovery
Across the MENA region, tourism — alongside moderating inflation, improved access to financial markets, and lower commodity prices — is providing vital support to non-oil economies.
Countries that rely less on hydrocarbons are seeing stronger-than-expected performance in 2025 due to a sharp rise in international tourist arrivals, especially in destinations like Morocco, Jordan, and Tunisia, which are leveraging heritage, culture, and climate appeal to attract global travelers.
Risks Remain Despite Upward Trend
Despite the positive indicators, the IMF warned that risks remain tilted to the downside, including:
- A potential drop in global demand impacting oil prices
- Renewed global trade tensions
- Persistent global inflation
- Possible re-escalation of geopolitical instability
Azour acknowledged that recent signs of easing tensions in the region are encouraging but urged vigilance, especially in navigating global economic uncertainties.
IMF Lending and Support in the Region
Since 2020, the IMF has approved $55.7 billion in financing to MENA countries, with $21.4 billion approved since early 2024 for programs in Egypt, Jordan, Morocco, and Pakistan. These packages have supported economic stabilization, inflation control, and sector-specific reforms, including those in tourism and digital infrastructure.
The IMF’s latest outlook confirms that travel and tourism are no longer side players in economic growth — they are central to the region’s future.
