The International Monetary Fund (IMF) has revised down its growth projections for Egypt’s economy in its latest World Economic Outlook report, citing the economic fallout from escalating regional tensions, including the Iran war and disruptions to global energy markets.
The Fund now expects Egypt’s economy to grow by 4.2% in the current fiscal year 2025/2026, down from 4.7% projected in its January update. The downgrade reflects mounting pressures from rising energy and commodity prices linked to the conflict.
For the next fiscal year, the IMF also lowered its forecast for Egypt’s growth to 4.8%, compared to 5.4% in its previous estimates.
The revisions come as part of a broader reassessment of regional economic prospects. The IMF announced on Tuesday that it had cut its growth forecast for the Middle East and Central Asia to 1.9% for the current year, nearly half the 3.9% projected in January.
The Fund noted that oil- and gas-exporting countries are among the most affected, particularly due to the ongoing war involving Iran and the closure of the Strait of Hormuz since late February.
Looking ahead, the IMF expects a notable recovery across the region, projecting growth of 4.6% next year, up from 4% in its January forecast. However, the Fund cautioned that this outlook hinges on the assumption that energy production and maritime traffic through the Strait of Hormuz return to normal within the coming months, an assumption that may need to be revisited if the conflict persists.
In its January report, the IMF had raised Egypt’s growth projections to 4.7% for the current fiscal year ending in June and 5.4% for fiscal year 2026/2027, up from 4.5% and 4.7%, respectively, in its October 2025 estimates.
Despite the downgraded outlook, recent domestic data point to resilient economic activity. Egypt’s GDP grew by 5.3% in the second quarter of the current fiscal year, compared to 4.3% in the same period a year earlier, according to the Ministry of Planning and Economic Development.
