Egypt Economy Rebounds in FY2025/26 as GDP Reaches 5.1% and Inflation Cools

Egypt experienced stronger economic performance during fiscal year 2025/26, led by higher economic expansion, cooler inflation, and stronger foreign investment inflows. Gross domestic product growth accelerated to 5.1%, up from 4.4% in the previous fiscal year, while annual inflation slowed sharply to 11.6% from 19.9%. Net international reserves climbed to $55.07 billion from $48.7 billion, and net foreign direct investment rose to $18 billion from $12.2 billion. Overall balance of payments swung to a $2.8 billion surplus after posting a $2.1 billion deficit a year earlier.

Despite broader progress, external imbalances remained a significant challenge. The current account deficit enlarged to $22.5 billion from $15.4 billion, weighed down by merchandise imports that exceeded $100 billion. On the fiscal side, government finances showed improvement as the budget deficit shrank to 5.8% of gross domestic product from 7.22%, while the primary surplus climbed to 4.9% from 3.52%.

Looking ahead to fiscal year 2026/27, institutions project continued growth alongside renewed price pressures. Growth forecasts span from 4.3% by the World Bank to 4.9% by the Central Bank of Egypt, against a national growth target of 5.4%. Meanwhile, inflation estimates for the upcoming fiscal year range between 12.3% and 17.8%, indicating that elevated prices will persist even as fiscal and trade balances evolve.