The World Bank also upgraded its growth forecast for Egypt for the current fiscal year 2026/2027 to 4.3%, compared with its previous estimate of 4%, an increase of 0.3 percentage points.
The World Bank Group has raised its estimate for Egypt’s economic growth in fiscal year 2025/2026 to 5.1%, up from its previous projection of 4.3% issued in April, representing an upward revision of 0.8 percentage points.
The World Bank also upgraded its growth forecast for Egypt for the current fiscal year 2026/2027 to 4.3%, compared with its previous estimate of 4%, an increase of 0.3 percentage points.
The revisions come amid improved economic performance in Egypt. World Bank data showed that real GDP grew by around 5.3% in the first half of FY2025/2026, compared with 3.9% during the same period a year earlier.
Growth was supported by stronger non-oil manufacturing activity, the gradual recovery of traffic through the Suez Canal, and robust performance in the tourism and telecommunications sectors.
Inflation, meanwhile, is estimated at 20.9% in 2025 and is expected to ease significantly to 13.3% in 2026, before rising slightly to 14.2% in 2027. Despite remaining broadly stable, inflation continues to run well above regional levels, according to the World Bank.
Egypt’s fiscal deficit is expected to gradually narrow over the forecast period, declining from 7.1% of GDP in 2025 to 6.8% in 2026 and 6.5% in 2027. Public debt, however, is expected to remain elevated at more than 80% of GDP.
The country’s current-account deficit is projected at 4.2% of GDP in 2025, before widening to 4.7% in 2026 and narrowing back to 4.2% in 2027.
Disruptions to shipping through the Suez Canal have continued to weigh heavily on Egypt’s foreign-currency revenues. The World Bank estimated cumulative losses at $16.5 billion between November 2023 and July 2026, adding further pressure to the country’s external financing position.
However, changes in regional shipping patterns have benefited some Egyptian energy infrastructure. As maritime traffic was rerouted around regional bottlenecks, tanker activity at terminals connected to the SUMED pipeline increased substantially. Traffic at El Sokhna and Sidi Kerir roughly doubled as some shipments shifted from Red Sea maritime routes to pipeline transportation toward the Mediterranean.
Egypt’s sovereign bond spreads widened in March 2026 before falling sharply by early September to below pre-conflict levels, recording one of the largest declines in spreads across the region, according to the World Bank.
Egyptian equities also advanced during the period, with the benchmark EGX30 index recording gains.
Despite the improved economic outlook, the World Bank highlighted Egypt’s persistent water stress as a risk that requires close monitoring, particularly amid forecasts of strong El Niño conditions.
