MENA Newswire, CAIRO: Egypt’s economy is forecast to grow by 4.8 percent in the 2026/2027 fiscal year, according to the World Bank’s latest Global Economic Prospects report, signalling a steady acceleration in growth following a period of economic strain. The projection reflects improving macroeconomic stability, stronger domestic demand, and a gradual easing of external pressures that weighed on the economy in recent years. The World Bank maintained that Egypt’s medium-term outlook remains among the more resilient in the Middle East and North Africa region.
The report also reaffirmed its estimate that Egypt’s gross domestic product will expand by about 4.3 percent in the current 2025/2026 fiscal year, before rising further in 2026/2027. This expected pickup follows slower growth recorded in earlier years, when high inflation, foreign currency shortages, and global economic disruptions constrained activity. The World Bank noted that recent policy adjustments have helped stabilize key indicators, creating conditions for a more sustained recovery.
Growth is being supported by a combination of stronger private consumption, improved export performance, and a recovery in services activity. The easing of import restrictions and improved availability of foreign exchange have helped normalize supply chains and support business operations. Tourism revenues have continued to recover, contributing to services growth, while manufacturing activity has benefited from stronger external demand and improved access to inputs.
Egypt’s economy had faced significant headwinds following a period of financial stress that culminated in sharp currency depreciation and elevated inflation. Growth slowed markedly during that period as purchasing power weakened and investment activity softened. Since then, a combination of fiscal measures, monetary tightening, and external financial support has contributed to restoring a degree of stability, allowing economic activity to regain momentum across several sectors.
Reforms underpin recovery outlook
The World Bank said the projected acceleration in growth reflects continued implementation of economic reforms aimed at strengthening fiscal discipline and improving the business environment. Measures to rationalize public spending, enhance revenue collection, and support private sector participation have played a role in improving investor confidence. Engagement with international financial institutions has also helped anchor policy frameworks and support macroeconomic adjustment efforts.
Despite the improved outlook, structural challenges remain. Public debt levels are still elevated, and external financing needs continue to pose constraints. Labor market pressures persist, particularly among young people, and poverty reduction remains a key policy challenge. The World Bank emphasized that sustaining growth will depend on continued reforms to boost productivity, expand employment opportunities, and enhance competitiveness across the economy.
External risks and regional factors
Regional developments continue to influence Egypt’s economic performance, particularly through trade and logistics channels. Disruptions affecting shipping routes linked to regional security tensions have had an impact on Suez Canal revenues and related services. While conditions have shown signs of stabilization, the World Bank noted that Egypt’s open trade position leaves it exposed to fluctuations in global demand and external shocks.
Over the medium term, the World Bank expects Egypt’s growth to be supported by a gradual improvement in investment conditions and a more stable macroeconomic environment. Foreign direct investment flows into infrastructure, energy, and manufacturing remain important sources of capital, while remittances continue to provide a key buffer for foreign exchange inflows. Maintaining policy consistency will be central to preserving these inflows.
The 4.8 percent growth forecast for 2026/2027 places Egypt on a firmer economic footing compared with recent years, according to the World Bank. While challenges remain, the projection indicates that the economy is moving toward a more balanced expansion path, supported by reforms, recovering domestic demand, and a gradual normalization of external conditions.