EBRD upgrades Egypt’s growth forecast: The European Bank for Reconstruction and Development (EBRD) has raised Egypt’s growth forecast for 2025 to 4.8%, up 0.8 percentage points from its May estimates, according to its latest Regional Economic Prospects report (pdf).

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The 2026 outlook: The EBRD kept its projections for 2026 unchanged — the multilateral lender expects the economy to grow 4.5% in 2026.

As for this fiscal year: The lender still sees the economy growing 4.4% in the fiscal year 2025-2026. It revised upwards its forecast for the fiscal year ending June 2025 to 4.5%, a 0.7 percentage-point upgrade from its May projections on the back of higher than expected growth over the first nine months of the fiscal year “driven by a recovery in the manufacturing sector following a deep contraction as well as strong performance in wholesale and retail trade and transportation.”

How this prediction compares to others: The International Monetary Fund sees Egypt’s economy growing 4.1% this fiscal year, before accelerating to 4.6% growth in 2026-27. Meanwhile, Fitch Solutions’ research unit BMI expects the economy to grow 4.7% this fiscal year and Deutsche Bank puts growth for the FY at 4.8%, citing a continued improvement in domestic demand.

What about last year’s performance? The multilateral lender now estimates Egypt’s economy to have grown 3.1% in 2024, up from its preliminary projection of 2.9%.

Inflation cooling: The bank pointed to a significant slowdown in price growth, noting that “inflation averaged 15.7% year on year between January and July 2025, half the rate of the same period in 2024.”

REMEMBER- Inflation slipped to its lowest level since March 2022 in August, coming in at 12.0%, and a number of analysts we spoke to see it staying on its downward trajectory.

Our external position looks more resilient: According to the EBRD, “remittances increased by 82.7% year on year during the period July 2024 to March 2025,” while “foreign investors have returned to the short-term government debt market, owning 44.7% of outstanding T-bills as of March 2025.”

That being said, debt concerns remain: The lender warned that “debt levels remain elevated, with servicing costs expected to absorb 65% of budget revenue in the fiscal year 2025-26,” pointing to slow progress on reforms holding back potential growth.

THE REGIONAL OUTLOOK- Growth in the southern and eastern Mediterranean region is expected to come in at 3.7% in 2025 and 3.2% in 2026, after coming in at 3.6% during the first six months of the year. “The region benefited from strong recovery in tourism, increased remittance flows and improving external balances.”

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