05.06.2026
Egypt’s economy continued to recover in 2025 after the exchange-rate unification and IMF-supported stabilisation measures of 2024. Growth is expected to remain moderate in 2026–2027, supported by private consumption, tourism, communications, a partial recovery in Suez Canal activity and improved access to foreign exchange. Inflation has declined from the 2023–2024 peak but remains in double digits, limiting household purchasing power. Fiscal pressures remain severe because of very high interest payments, while external vulnerabilities are elevated due to energy prices, Suez Canal uncertainty, external debt repayments and regional geopolitical risks.
| Indicators | 2025 | 2026 | 2027 |
|---|---|---|---|
| GDP growth (%, yoy) | 4.4 | 4.3 | 4.0 |
| Inflation (%, yoy) | 20.9 | 13.6 | 13.7 |
| Employment rate (% of working-age population, 15+) | 42.5 | 43.2 | 43.8 |
| Fiscal balance (% of GDP) | -7.1 | -7.6 | -6.9 |
| Gross public debt (% of GDP) | 82.5 | 82.9 | 79.2 |
| Current account balance (% of GDP) | -4.2 | -4.2 | -4.0 |
Recovery continues, but risks have increased
Egypt’s real GDP growth reached 4.4% in 2025, up from 2.4% in 2024. The recovery was supported by stronger private consumption, better access to foreign exchange and imports, stronger non-oil manufacturing, tourism, communications and a gradual improvement in Suez Canal traffic.
Growth is projected at 4.3% in 2026 and 4.0% in 2027. The outlook remains positive but fragile. Higher oil and gas prices, capital outflows, regional conflict, lower Suez Canal receipts and possible tourism disruptions could weaken growth and external financing. Structural reforms to reduce the state’s footprint and improve the business environment remain essential for stronger private-sector-led growth.
Inflation remains high despite disinflation
Inflation declined from the very high levels seen in 2023–2024, but it remains elevated. Average inflation is estimated at 20.9% in 2025 and projected at 13.6% in 2026 and 13.7% in 2027. The Central Bank of Egypt reduced policy rates between April 2025 and February 2026 as disinflation progressed, but rates remain high.
Energy-price adjustments, imported inflation, exchange-rate pressures and food prices are expected to delay a faster decline in inflation. High inflation continues to weigh on real incomes and poverty reduction, making targeted social protection important.
Fiscal pressures remain severe
Egypt’s fiscal deficit widened to 7.1% of GDP in 2025 and is projected to reach 7.6% in 2026 before narrowing to 6.9% in 2027. The primary balance remains in surplus, but very large interest payments continue to crowd out priority spending on health, education and social protection.
Public debt declined from 90.1% of GDP in 2024 to 82.5% in 2025, but is projected to remain around 83% in 2026 before falling to 79.2% in 2027. Debt reduction will depend on sustained primary surpluses, revenue mobilisation, lower borrowing costs, asset sales and continued fiscal discipline. Contingent liabilities remain an additional risk.
External position remains vulnerable
The current account deficit is projected to remain around 4% of GDP in 2025–2027. Remittances, tourism revenues and foreign direct investment provide important support, while the Suez Canal, energy trade balance and external debt repayments remain key vulnerabilities.
External financing needs are large, with substantial debt repayments due in 2026. Foreign reserves and foreign-currency assets have improved, but Egypt remains exposed to portfolio outflows, higher oil prices, regional conflict, weaker tourism and disruption to Red Sea and Suez Canal traffic.
Overall outlook
Egypt’s outlook has improved compared with the acute crisis period, but macroeconomic vulnerabilities remain high. Growth should remain around 4% in 2026–2027, inflation is declining but still elevated, and fiscal pressures remain intense because of interest costs. Sustained improvement will require exchange-rate flexibility, fiscal consolidation, lower state dominance, stronger private investment, export growth, better tax mobilisation and protection for vulnerable households.
Sources:
World Bank, Egypt Macro Poverty Outlook, April 2026.
International Monetary Fund, Arab Republic of Egypt: 2025 Article IV Consultation and Fourth Review Under the Extended Arrangement Under the Extended Fund Facility, July 2025.
International Monetary Fund, Arab Republic of Egypt: 2026 Programme Review and Country Data.
International Monetary Fund, World Economic Outlook, April 2026.
Central Bank of Egypt, Monetary Policy Report, Q1 2026.
Central Bank of Egypt, Inflation and Monetary Policy Updates, 2026.
