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The European Bank for Reconstruction and Development (EBRD) expects Egypt’s economy to expand by 5% in 2027, revising its previous forecast of 4.9%. However, the bank trimmed its projection for 2026 growth to 4.6%, down from 4.9%.

The EBRD said Egypt’s real GDP growth reached 5% during the first half of 2026, compared with 4.8% a year earlier. Growth was supported by stronger activity in telecommunications, trade and petroleum refining, while manufacturing growth slowed following its strong performance in 2025.

The energy sector continues to face challenges as domestic natural gas output declined for the 16th consecutive quarter. Egypt has therefore increased imports of liquefied natural gas and pipeline gas, with imports accounting for around 36% of domestic demand.

Inflation remained elevated at between 12% and 15% during the first half of 2026, above the Central Bank of Egypt’s 5%-9% target range. The EBRD also pointed to higher energy prices and changes in residential rent regulations as factors contributing to inflationary pressures.

Meanwhile, the Central Bank of Egypt maintained its interest rate at 19.5% in July, marking the third consecutive meeting without a change after cumulative monetary easing of 825 basis points.

Egypt has completed seven of eight reviews under the IMF’s Extended Fund Facility and two of three reviews under the Resilience and Sustainability Facility. Withdrawals under the two programs have reached approximately $7.3 billion.

The EBRD also reported that Egypt’s public debt stood at 83.9% of GDP at the end of March 2026, while government gross financing needs are estimated at about 50% of GDP for the 2026/27 fiscal year.

Foreign currency inflows have also strengthened, with remittances from Egyptians abroad and tourism revenues rising by 36.3% and 9.4%, respectively. Net international reserves reached a record $56.3 billion in July 2026.

Despite the projected acceleration in growth, the EBRD highlighted downside risks linked to continued regional instability, particularly its potential effects on energy markets and foreign investor sentiment.