The IMF has upgraded Egypt’s growth outlook for FY2025/26 and FY2026/27, as rising remittances and stronger foreign reserves support the economy. Inflation and a widening current-account deficit remain key challenges.
Egypt’s economy is projected to grow 5.1% in FY2025/26 and 4.7% in FY2026/27, according to the International Monetary Fund’s (IMF) October 2026 World Economic Outlook. The revised forecasts improve on the Fund’s July projections, although persistent inflation and external imbalances continue to pose risks.
The IMF raised its growth forecasts from 4.6% to 5.1% for FY2025/26 and from 4.4% to 4.7% for FY2026/27, increases of 0.5 and 0.3 percentage points, respectively.
In its July assessment, the Fund attributed the earlier upgrade for FY2025/26 to stronger-than-expected economic activity in the third quarter. It also warned that the delayed effects of the Middle East conflict could weigh on investment and growth in the following fiscal year.
The October projections suggest a more resilient outlook than previously anticipated.
Comparisons with international forecasts require a distinction between reporting periods. Egypt’s fiscal year runs from July to June, so the IMF’s 2026 and 2027 projections for Egypt correspond to FY2025/26 and FY2026/27. Global and regional headline forecasts, by contrast, refer to calendar years.
The IMF projects global GDP growth of 3.1% in 2026 and 3.4% in 2027. For the Middle East and North Africa (MENA), it forecasts a 2.0% contraction in 2026, followed by 7.0% growth in 2027.
Egypt’s projected expansion exceeds the global headline rate in both forecast years, although the periods are not directly aligned. The regional outlook reflects severe disruptions in parts of the Middle East, particularly in energy production and transportation, followed by an anticipated recovery as conditions normalize.
For Egypt, sustaining growth will depend on domestic demand, investment, and the economy’s ability to manage external pressures.
Remittances strengthen external support
Foreign-currency inflows are providing additional support to Egypt’s external position.
On October 13, 2026, the Central Bank of Egypt (CBE) reported that remittances from Egyptians working abroad reached $33.9 billion in January–August 2026, up 27.2% from $26.6 billion in the corresponding period of 2025. In August alone, remittances rose 21.7% year on year to approximately $4.2 billion.
The figures cover the first eight months of the calendar year. Separately, remittances reached a record $47.3 billion in FY2025/26, up 29.6% from approximately $36.5 billion in FY2024/25, according to a CBE announcement published on August 20.
Remittances provide an important source of foreign currency, supporting household incomes and helping finance external payments. The IMF also highlighted remittances, tourism receipts, and the gradual recovery in Suez Canal revenues in its July 30 review of Egypt’s economic reform program.
International reserves offer another buffer. The CBE reported net international reserves of $57.35 billion at the end of September 2026, up from approximately $57.21 billion at the end of August.
Sustaining these inflows while expanding exports and tourism receipts would help diversify foreign-currency earnings and strengthen Egypt’s capacity to meet external obligations.
Inflation remains a challenge
Despite the improved growth outlook, inflation remains elevated. The IMF projects Egypt’s average consumer-price inflation to decline from 20.4% in FY2024/25 to 13.3% in FY2025/26, before rising to 14.8% in FY2026/27.
For comparison, the Fund forecasts global inflation of 4.7% in calendar year 2026 and 4.1% in 2027. The corresponding MENA projections are 14.9% and 11.0%.
Egypt’s projected average inflation rate is below the MENA aggregate in 2026 but above it in 2027.
