Egypt’s economy is expected to stage a gradual recovery over the next two years, coupled with easing monetary policy, a rebound in industrial activity, and major investment deals, according to the World Bank’s Global Economic Prospects report released on June 11. The report projects real GDP growth of 4.2 percent in the 2025/2026 fiscal year, rising modestly to 4.6 percent in 2026/2027.
A more accommodative monetary policy, namely, interest rate cuts aimed at supporting the private sector, coupled with a gradual revival in the industrial sector, is expected to play a significant role in Egypt’s economic recovery. According to the World Bank, the Ras El Hekma development agreement signed with the United Arab Emirates is pivotal to driving the growth.
Helped by falling global oil and gas prices, stable remittance inflows, and continued strength in the tourism sector, Egypt’s current account deficit is projected to narrow in the 2025/2026 fiscal year. In parallel, the non-oil trade gap is expected to decline as the impact of import backlog clearance from the previous year gradually fades.
The World Bank warns that the situation could worsen if tariffs rise more than anticipated or if policy uncertainty persists. “Risks to the global outlook remain tilted to the downside,” the report stated. “Growth may fall short of expectations if trade restrictions intensify or political uncertainty continues, which could also lead to mounting financial pressures.”
Growth across developing economies is projected to reach an average of 3.8 percent in 2025, inching up to 3.9 percent in both 2026 and 2027, remaining well below the rates recorded during the 2010s. Low-income countries are also under mounting economic strain, with the World Bank revising its 2025 forecast downward to 5.3 percent, marking a 0.4 percentage point drop from earlier projections at the beginning of the year.
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