Egypt’s economy is expected to expand by 4.6% in the 2025/26 fiscal year, supported by easing inflation, lower interest rates, and a weaker currency that is boosting exports, according to a Reuters poll released on Monday.
The survey, conducted between October 6 and 20 among 16 economists, projected gross domestic product (GDP) growth to accelerate further to 4.9% in 2026/27 and 5.3% in 2027/28.
This marks a notable rebound from the sharp slowdown to 2.4% recorded in 2023/24, when economic activity was strained by high inflation and currency pressures.
The recovery began after March 2024, when Egypt implemented a significant currency devaluation and raised interest rates as part of an $8 billion financial support program with the International Monetary Fund (IMF).
The devaluation improved Egypt’s external position, leading to a surge in tourism revenues and remittances from Egyptians working abroad.
The economy also received a major boost in February 2024 from a $35 billion real estate investment by Abu Dhabi at Ras El Hekma on the Mediterranean coast, which injected fresh foreign capital into the country.
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The Central Bank of Egypt reported earlier this month that GDP growth accelerated to 5.0% year-on-year in the second quarter of 2025, up from 4.8% in the first quarter.
Analysts at Capital Economics said in a note last month that lower inflation and looser monetary policy were key drivers of this momentum.
“Egypt’s economy, is shifting into a higher gear as improved external competitiveness aids exports and the domestic manufacturing sector,” Capital Economics stated.
The poll indicated that inflation, having fallen from a record 38.0% in September 2023, is expected to continue easing, averaging 12.3% in 2025/26, 10.2% in 2026/27, and 7.5% in 2027/28.
Official data showed that annual inflation slowed to 11.7% in September from 12.0% in August.
Despite the progress, the government raised prices on various petroleum products by between 10.5% and 12.9% last week in an effort to curb subsidies and reduce the budget deficit.
Interest rates are also projected to decline further. The central bank’s overnight lending rate, currently at 22.0%, is forecast to fall to 16.00% by the end of June 2026, then to 13.00% in 2027, and 11.25% by June 2028.
The bank has already cut its benchmark rate four times this year, totaling a reduction of 625 basis points.
Meanwhile, analysts expect the Egyptian pound to continue weakening modestly over the next few years, reaching 49.85 per U.S. dollar by the end of June 2026, 52.00 by June 2027, and 54.00 by June 2028, compared with its current rate of 47.50 to the dollar.
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Image Credit: Reuters
