• Growth driven by private investment and stronger external inflows

• Primary surplus and tax revenues show marked improvement

• IMF lowers 2026 outlook amid regional tensions

Egypt’s economy grew by 5.3% in the first half of the 2025–2026 fiscal year, supported by a rise in private investment, Finance Minister Ahmed Kouchouk said on April 15.

Speaking in Washington during a roundtable with international investors—organized by Jefferies International and Société Générale on the sidelines of the IMF and World Bank Spring Meetings—the minister highlighted improvements in key external indicators, driven by tourism, non-oil exports, remittances, and foreign direct investment.

He also reported a primary surplus of 3.5% of GDP between July 2025 and March 2026, reflecting stronger tax collection efforts. Tax revenues rose by 29% over the period, supported by improving business confidence and increased private sector activity.

The overall budget deficit narrowed to 5.2% of GDP during the same period, down from 6% a year earlier.

Kouchouk added that Egypt’s debt-to-GDP ratio declined by about 13% over the past two fiscal years, contrasting with trends across emerging markets, where the average ratio rose by about 6% over the same period.

Despite these gains, the outlook remains exposed to regional risks. In its latest World Economic Outlook, published April 14, the IMF revised down Egypt’s growth forecast for 2026 to 4.2%, from 4.7% previously projected in January.

The downgrade reflects the expected impact of the Middle East conflict, particularly tensions involving Iran, which have pushed up energy and commodity prices and disrupted key trade routes.

In late February, the IMF approved the disbursement of about $2.3 billion to Egypt under its Extended Fund Facility and the Resilience and Sustainability Facility, noting improvements in macroeconomic indicators, including lower inflation and easing pressure on the foreign exchange market.

However, the Fund cautioned that progress on structural reforms remains uneven, particularly regarding efforts to reduce the state’s role in the economy.

Walid Kéfi