Egypt’s economy demonstrated solid external resilience entering mid-2026, driven by record inflows and key international partnerships. Remittances from Egyptians abroad surged by 33.2% year-on-year to reach a record USD 39.2 billion between July 2025 and April 2026, significantly boosting foreign exchange liquidity. This external stability was further bolstered by reaching a staff-level agreement with the IMF on the seventh review of the Extended Fund Facility and the second review of the Resilience and Sustainability Facility, unlocking approximately USD 1.6 billion in additional financing. Concurrently, international backing expanded through an upcoming €1.5 billion EU disbursement, World Bank backing for a USD 150 million infrastructure guarantee facility, and strategic agreements with GAFI, EBRD, Afreximbank, and Türkiye to enhance regional logistics and trade corridors.
Despite robust macroeconomic buffers, the domestic private sector continued to face contractionary pressures. The S&P Global Purchasing Managers’ Index (PMI) fell to 46.0 in June 2026—its lowest level in nearly three and a half years—as weak demand, supply chain disruptions, and regional tensions weighed on business activity. However, price pressures showed signs of gradual moderation, with headline annual inflation easing slightly from 13.4% in April to 13.0% in May 2026. To stimulate private-sector participation, the government moderated public investments to EGP 205.1 billion in Q3 FY25/26 while overall implemented investments grew by 20% year-on-year to EGP 637 billion, allowing private investment to account for over 50% of the total.
To accelerate economic momentum, Egyptian authorities enacted targeted structural and institutional reforms, including a second package of tax facilitation measures featuring faster VAT refunds, administrative relief, and incentives for stock market listings. State entities also executed agreements worth EGP 196 billion to settle inter-governmental financial liabilities, while the banking sector completed its transition to the international ISO 20022 messaging standard for cross-border payments. Looking ahead, the World Bank upgraded Egypt's FY25/26 GDP growth forecast to 4.6%, with annual inflation expected to average around 13.0% in FY26/27. The primary challenge moving forward remains translating macroeconomic stability and international financing into sustained, private-sector-led growth.
