Fitch Solutions' BMI projects Egypt’s GDP growth at 4.7% in FY2025/26
Updated 8/25/2025 7:41:00 AM
Arab Finance: Fitch Solutions’ research unit BMI expects Egypt’s gross domestic product (GDP) to grow to 4.7% in the current fiscal year (FY) 2025/2026, supported by domestic demand, higher investments, and stronger exports, according to data from its latest country risk report for Egypt.
Moreover, the research unit noted that Egypt's growth is forecast to reach 5.0% in FY 2026/2027.
BMI said rising social spending and wage increases across public and private sectors will sustain household consumption.
It also pointed to easing inflation, lower borrowing costs, higher returns on saving instruments, and an increase in remittance inflows.
Investment is expected to increase for the first time in three years, helped by reduced global uncertainty, particularly around US tariffs, some easing of geopolitical tensions, lower interest rates, and stronger foreign direct investment inflows.
Between 2026 and 2034, investment is projected to rise gradually, supported by foreign inflows and efforts to improve the business environment, though public investment will remain limited by fiscal consolidation.
Inflation is projected to continue declining through the second half (H2) of 2025 and into 2026, helped by a stable currency and completed fiscal measures.
Softer inflation in July led BMI to revise down its forecast for the year from 15.3% to 14.4%. Inflation is expected to ease further in August and September before rising slightly in the fourth quarter following electricity and fuel price adjustments, averaging 12.5% in the second half.
For 2026, inflation is expected to average 10.0% and move within the Central Bank of Egypt’s 5%-9% target range by the final quarter.
The Egyptian pound is forecast to trade in the range of EGP 48-50 per US dollar in the near term, assuming portfolio inflows remain steady.
Foreign exchange reserves are projected to exceed $50 billion by 2026, compared to $49.0 billion at the end of July, equivalent to about four months of imports.
BMI expects the external position to improve, with the current account deficit narrowing to 3.6% of GDP in FY 2025/2026 and 3.1% in FY 2026/2027, supported by higher exports, recovering Suez Canal revenues, remittances, and tourism receipts.
The public debt-to-GDP ratio is projected to fall from 88.3% in June 2025 to 84.3% by the end of FY 2026/2027, driven by higher nominal GDP and continued primary surpluses.
The fiscal deficit is expected to narrow to 6.6% of GDP in FY2025/2026 and 6.1% in the following year, below the long-term average of around 10%.
From 2026 to 2034, Egypt’s GDP growth is forecast to average 4.6% annually, compared with 3.8% between 2010 and 2019.
Private consumption is expected to remain the main driver, reaching about 87% of GDP by 2034.
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