The Central Bank of Egypt expects real GDP growth to hit 5.1% this fiscal year, up 0.3 percentage points from its last prediction, while its predictions for the following fiscal year are up by a greater 0.4 percentage points from its last outlook to 5.5%, according to the bank’s Monetary Policy Report (pdf) for 4Q 2025.

The upgrade comes on the back of “anticipated contributions from non-petroleum manufacturing and services sectors, which are expected to accelerate at a faster pace, supported by the projected progress in monetary easing, which is likely to further support real private sector credit growth,” the bank said.

It also follows 4.9% GDP growth during 4Q, which the CBE says was “mainly driven by non-petroleum manufacturing, tourism, and communications.” The previous quarter clocked in at 5.3% y-o-y — a 1.8 percentage point increase y-o-y and the quickest quarterly growth figures since the start of 2022.

The bank seems confident that this growth shouldn’t have a serious impact on inflation, seeing inflation “well on track to reach the CBE target of 7% (± 2%), on average, in 4Q 2026” with demand-side inflationary pressures “expected to remain contained.”

To do that, the bank’s Monetary Policy Committee is committed to making sure “any interest rate cuts remain conditional upon a stable inflation path,” EG Bank board member Mohamed Abdel Aal tells EnterpriseAM. “Expected rate cuts during 2026 will be limited and incremental, maintaining positive real interest rates to ensure price stability,” he says.

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