The Egyptian Central Bank most recently received an additional US3.5bn transfer from Qatar under a development deal for a luxury real estate and tourism project on Egypt’s Mediterranean coast, part of a total package valued at US7.5bn. This was the latest transfer following the UAE’s USD35bn transfer in 2024. In late 2025, the IMF also reached a staff level agreement with Cairo on a 5th and 6th review of its program, which should release two new tranches of the US8bn program.  

Egypt’s external position is expected to slightly improve but remain negative at -4.3% in 2026, after -5.1% in 2025. Energy imports and still low gas exports were an important contributor of the external gap, as Egypt continued to be a net gas importer. In addition, Suez Canal traffic did not increase (when it does, an extra US8bn could flow into the country). On the bright side, remittances grew by 42% between January and October 2025, reaching US33.9bn, driven by strong economic performance in the Gulf region. 

Fiscal performance remained clouded by interest payments as the overall balance stood at -10% in 2025. It is expected to slightly improve to -8% in 2026. Meanwhile, the primary balance remained at a surplus at 3.5% of GDP. Government revenues continued to improve, even though they remained below international standards as tax to GDP stood at 12%.

In 2024, Egypt’s total public debt stood at 97% of GDP, among the highest historically, since Egypt has entered a fast debt-reduction period, decreasing the debt-to-GDP ratio above 5% annually. It is expected to reach 80% in 2027. These efforts have begun to ease Egypt’s financing pressures: Credit default swaps declined by more than -50% through 2025 and government yields declined by -22% during the same period. As a result, credit rating agencies started to upgrade Egypt’s outlook.  In October 2025, Egypt tapped international markets via a US1.5bn dual-tranche sukuk issuance. It has also been reported that Egypt is exploring the issuance of a Eurobond of up to USD4bn in the 2026/27 period. Egypt continues to have large liquidity challenges as it faces maturities of up to 7% of its external debt in 2026 and 2027.

Together with the 5th and 6th review of the IMF program, the Egyptian cabinet announced the expected approval of a tax simplification package. This reduces the burden of taxation for SMEs and offers new incentives to capital gains, as well as new VAT refunds, to support growth. In an effort to increase private sector participation in the economy and shore up short-term revenue, the Egyptian state together with international lenders designed a privatization plan to partially auction 35 state/military-owned companies on the Cairo Stock Exchange. During 2025, several companies went public, including Wataniya Petroleum. Several others, including tobacco, telecom and chemical companies, are expected to go partially or fully public during 2026/27. 

Following the economic impacts of the pandemic and the Ukraine war, the Egyptian leadership has taken steps to shore up some domestic capacity in manufacturing and agriculture. Egypt has heavily invested in military-controlled corporates in the textile industry to modernize its weaving and spinning industry in northern Cairo to increase export output. Egypt is an important exporter of clothing to the US, with whom it enjoys a no-tariff regime for its knitting industry. In the agriculture sector, Egypt is undertaking an ambitious plan to reclaim 6mn square meters of land from the dessert to increase food production in the Nile basin, an initiative that faces significant challenges, given rising temperatures and ongoing water disputes with upstream Nile basin neighbors.

Egypt’s main challenge remains sustainable growth in the mid and long term to provide employment and prosperity to a population projected to almost double by 2050. Cairo is expected to grow by 10mn people in the next 25 years. Under the current 2030 plan, the Egyptian leadership has defined energy, both renewable and natural gas, as well as agriculture and manufacturing as the top economic drivers. Regarding energy, Egypt has been working with European partners to become a regional energy hub, including a pipeline linking Greece to Egypt, an agreement with Turkey to supply LNG and electricity interconnector to provide up to 3GWs to Italy. 

The Egyptian president maintains tight control over institutions, backed by the army, but the autocratic governing system poses an underlying risk of social unrest. While the economy is improving, social unrest should not be fully dismissed. Other countries in the region, such as Morocco, have faced severe protest despite strong economic growth, demanding better social services. Going forward, rising social discontent related to high youth unemployment, low purchasing power, the currency depreciation and disagreements with the leadership might trigger revolts seeking institutional change. Security risks related to latent conflict in the Levant, Libya, Sudan, Yemen and the horn of Africa also weigh on the downside.