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

- URL: https://stocks.freetheai.org/news/egypt-economy-rebounds-in-fy2025-26-as-gdp-reaches-5-1-and-inflation-cools-f21ae7
- Published: 2026-10-19T07:04:15Z
- Category: macro; sentiment: mixed; impact: medium
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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.

## Key points

- Egypt GDP growth rose to 5.1% in FY2025/26 from 4.4% in the prior fiscal year.
- Annual inflation declined significantly to 11.6% in FY2025/26 compared to 19.9% in FY2024/25.
- Foreign direct investment rose to $18 billion, lifting net international reserves to $55.07 billion.
- The current account deficit widened to $22.5 billion due to merchandise imports exceeding $100 billion.

## Questions and answers

### How fast did Egypt's economy grow in FY2025/26?

Egypt's GDP growth accelerated to 5.1% in FY2025/26, up from 4.4% in FY2024/25.

### What is the inflation outlook for Egypt in FY2026/27?

Forecasts project inflation rising back to between 12.3% and 17.8% in FY2026/27, following a drop to 11.6% in FY2025/26.

### Why did Egypt's current account deficit widen in FY2025/26?

The current account deficit expanded to $22.5 billion from $15.4 billion, driven by merchandise imports exceeding $100 billion.