Egypt’s economy is expected to grow by 4.6% in the current fiscal year, a Reuters poll showed Monday, as the North African nation reaps the benefits of falling inflation, lower interest rates and a competitive currency that is boosting exports.
The projected growth for the year through next June marks a strong acceleration from the 2.4% growth recorded in the 2023/24 fiscal year. According to the median estimate of 16 economists surveyed between Oct. 6 and 20, the momentum is set to continue, with gross domestic product growth projected to reach 4.9% in 2026/27 and 5.3% in 2027/28.
The recovery took hold after a pivotal March 2024, when Egypt signed an $8 billion financial support package with the International Monetary Fund. The deal involved a sharp devaluation of the Egyptian pound and a hike in interest rates—painful but necessary reforms that are now fueling a rebound.
“Egypt’s economy is shifting into a higher gear as improved external competitiveness aids exports and the domestic manufacturing sector,” the research firm Capital Economics said in a note last month.
The cheaper currency made Egypt a more affordable destination for tourists and increased the value of remittances sent home by Egyptians working abroad. The economy received a further, massive boost in February 2024 from a $35 billion real estate investment by Abu Dhabi at Ras El Hekma on Egypt’s Mediterranean coast.
Signs of the turnaround are already visible. The central bank reported this month that growth accelerated to 5.0% in the second quarter of 2025, up from 4.8% in the first quarter.
Crucially, the growth is being accompanied by a significant cooling of inflation. After peaking at a record 38.0% in September 2023, average inflation is forecast to drop to 12.3% in 2025/26, 10.2% the following year, and 7.5% in 2027/28. Data showed annual inflation slowed to 11.7% in September.
This disinflationary trend has given the Central Bank of Egypt room to act. It has cut its benchmark interest rate four times this year, for a total reduction of 6.25 percentage points. The poll predicts the overnight lending rate, now at 22.0%, will fall to 16.00% by the end of next June.
Despite the positive outlook, challenges persist. The government raised prices on a range of petroleum products by 10.5% to 12.9% last week, a move aimed at reducing its subsidy burden but one that pinches household budgets.
Analysts also expect the Egyptian pound to gradually weaken further, forecasting a rate of 49.85 to the U.S. dollar by June 2026 from the current 47.50, a controlled depreciation intended to keep exports competitive.
For a nation that has grappled with economic pressure for years, the forecasts signal a hopeful new chapter of sustained, if cautious, growth.
