Egypt and the GCC are in a region “seeing strengthening macroeconomic and credit fundamentals,” according to First Abu Dhabi Bank’s (Fab) Global Investment Outlook (pdf) for the year. After a sluggish period in 2024 and 2025, the region is entering 2026 with a momentum driven by robust non-oil GDP and structural policy reforms, while the US and Europe grapple with a deepening risk that a “stagflationary environment may evolve,” according to the report.

The bank expects real GDP growth in Egypt to hit 4.5% this fiscal year and 5.1% the following one, attributing this — along with the stabilization of the EGP — to the “depth and breadth of foreign (financial and structural) support for Egypt,” which it describes as a commitment that is “too big to fail.”

But this recovery is not happening in a vacuum. Egypt faces a set of “challenging crosswinds.” Externally, the pressure is building from persistent global inflation risks and a potential transition in US Fed leadership. Domestically, real interest rates have returned to positive territory, fundamentally shifting the environment from one driven by cheap liquidity to one based on the hard reality of earnings and productivity.

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