ED – this is bne IntelliNews's annual OUTLOOK report for Egypt. We are making forward-looking assessments for major Global Emerging Markets in Emerging Europe, Asia, Latin America, Africa and the Middle East, drawing on insightful reporting from our bureaus around the world.

What is on the agenda? What are the prospects for economic growth and what problems lie in store in the coming year? A detailed report that covers business, economics, finance, energy, politics and the major sectors of the most important markets.

Egypt enters 2026 in a markedly stronger position than during the 2023–24 balance-of-payments crisis. The pound is now floating, FX shortages have eased, parallel-market pressures have disappeared and inflation has fallen sharply from its 2023 peak. However, public debt remains high and poverty reduction has been slow, underscoring that the economy is transitioning from stabilisation to a cautious, investment-led growth phase, rather than a full recovery.

IMF, World Bank and private-sector projections place real GDP growth in the 4.5–5.2% range in FY2025/26, up from roughly 2.4–2.8% in FY2023/24. Growth is increasingly driven by private consumption, tourism, remittances and a gradual revival in investment, following the March 2024 devaluation, FX liberalisation and reform reset under the IMF programme. Momentum is expected to carry into 2026, though growth remains below Egypt’s long-term potential.

Disinflation has been rapid. Headline inflation fell from a peak of about 38% in September 2023 to around 12.5% by October 2025, reflecting tight monetary policy, currency adjustment and easing supply constraints. The Central Bank of Egypt is now guiding inflation gradually towards its 5–9% medium-term target range, with further disinflation expected through the second half of 2026. Risks remain from fuel-price adjustments, rent liberalisation and any renewed FX or commodity shocks.

Fiscal policy remains anchored to consolidation under the IMF programme. The FY2025/26 budget, with total spending of about EGP4.6 trillion (around $91bn), targets a primary surplus of roughly 4% of GDP, supported by projected revenues of EGP3.1 trillion (about $61bn). The overall deficit remains large, reflecting high interest costs, but authorities aim to reduce general-government debt from around 92% of GDP in FY2024/25 to the low-80% range over the medium term, assuming sustained primary surpluses, privatisation receipts and growth recovery.

The composition of growth is improving. Non-oil private-sector activity recorded its strongest expansion in five years in late 2025, with PMI readings moving above the 50 threshold on broad-based gains across manufacturing, construction and services. Tourism has rebounded strongly, remittances have stabilised after the FX reset, and selected manufacturing segments linked to exports and import substitution are showing renewed momentum.

External buffers have been rebuilt and are increasingly supported by large-scale foreign investment commitments, particularly from Gulf partners. Net foreign assets returned to positive territory in 2024 and strengthened further in 2025 following IMF disbursements, including under the Resilience and Sustainability Facility.

These gains have been reinforced by substantial UAE-led investments, most notably the Ras El Hekma development on the Mediterranean coast, which alone involves commitments of more than $30bn over several years, combining upfront FX inflows with phased real-estate, tourism and infrastructure investment. Additional Gulf interest spans energy, ports, logistics, agribusiness, real estate and financial services, while authorities continue to court foreign direct investment through asset sales, land monetisation and public-private partnerships.

Looking ahead to 2026, Egypt’s investment pipeline also includes privatisation and minority stake sales in state-owned enterprises, expanded renewable-energy projects, LNG and energy-transition investments, and logistics projects linked to ports and industrial zones. These inflows are expected to remain a critical pillar of external financing, alongside concessional funding from IFIs, even as Suez Canal revenues remain vulnerable to Red Sea security disruptions.

The banking sector appears broadly resilient, with capital and liquidity buffers above regulatory minima and improved FX conditions. However, high real interest rates, sovereign exposure and public-sector crowding-out continue to constrain private-sector credit growth, limiting the pace at which investment can translate into broader employment gains in 2026.

Key risks to the outlook include a renewed inflation or FX shock, slippage on fiscal targets amid heavy debt-service costs, slower-than-expected progress on state-owned enterprise reform and competition policy, and adverse regional developments affecting tourism, trade routes and investor sentiment.

Read the full OUTLOOK 2026 Egypt report (click here)