CAIRO, June 6 – Egypt’s economy is expected to maintain solid growth over the coming years, though expansion is projected to slow modestly as structural challenges continue to weigh on economic activity, according to the latest Regional Economic Prospects report from the European Bank for Reconstruction and Development (EBRD).
The EBRD forecasts economic growth of 5.1% in 2025 before easing to 4.9% in both 2026 and 2027, reflecting a resilient outlook despite a more challenging external environment.
The report highlights Egypt’s ongoing economic reforms and macroeconomic stabilization efforts, while noting that declining domestic oil and gas production is becoming an increasing concern for policymakers.
Egypt has gradually shifted from being a net gas exporter to relying more heavily on imported natural gas, with imports now accounting for roughly one-third of the country’s energy requirements.
The growing dependence on imported energy has increased exposure to international commodity price fluctuations and geopolitical developments affecting global energy markets.
Inflation also remains a key challenge for the economy.
Consumer prices rose 15.2% year-on-year in March 2026, driven primarily by higher food and energy costs.
In response, the Central Bank of Egypt maintained its benchmark interest rate at 19.5% in April, signaling a cautious approach as authorities seek to balance inflation control with economic growth.
Despite inflationary pressures, Egypt’s external position has continued to strengthen.
Foreign exchange reserves increased to approximately $52.8 billion, supported by ongoing economic reform programs and financing arrangements backed by the International Monetary Fund.
The EBRD noted that these reserves provide an important buffer against external shocks and help reinforce investor confidence in the economy.
Across the broader Southern and Eastern Mediterranean region, growth is expected to moderate to 2.5% in 2026 before recovering to 4.2% in 2027.
According to the report, countries in the region are facing mounting challenges from geopolitical tensions, elevated energy prices and disruptions to international trade routes.
While sectors such as tourism and remittance inflows continue to support economic activity in several economies, the impact of global uncertainty varies significantly across countries.
The EBRD warned that prolonged regional instability could dampen investment flows, reduce tourism activity and weaken trade performance, particularly in economies with high debt burdens and limited fiscal flexibility.
However, countries with stronger foreign exchange reserves and more diversified economic structures are expected to remain relatively resilient.
For Egypt, continued economic reforms, external financing support and efforts to strengthen energy security are expected to play a crucial role in sustaining growth and maintaining macroeconomic stability over the medium term.
