Egypt’s economy is expected to maintain solid growth but at a slightly slower pace in the coming years, according to the European Bank for Reconstruction and Development (EBRD).
The bank forecasts growth easing from 5.1% in 2025 to 4.9% in 2026 and 2027, as structural pressures continue to weigh on the economy. Oil and gas production has declined in recent quarters, increasing reliance on imported gas, which now meets around one-third of domestic demand.
Inflation rose to 15.2% in March 2026, driven by higher energy and food prices. The Central Bank of Egypt kept its key policy rate unchanged at 19.5% in April, while international reserves reached $52.8 billion, supported by continued International Monetary Fund (IMF) assistance.
The broader southern and eastern Mediterranean (SEMED) region is expected to see growth slow to 2.5% in 2026 from 3.1% in 2025, before rebounding to 4.2% in 2027, the EBRD said in its latest Regional Economic Prospects report.
The outlook reflects heightened regional tensions, which have disrupted trade routes, pushed up energy prices, and added to inflationary pressures. The impact varies across countries, with economies such as Iraq, Lebanon, Jordan, Morocco and Tunisia facing differing levels of exposure to fiscal and external vulnerabilities.
Iraq’s economy is projected to contract further in 2026 amid oil export disruptions, while Lebanon faces renewed recessionary pressures following intensified conflict and infrastructure damage. Jordan’s growth is expected to ease modestly, Morocco to slow slightly from strong tourism-driven performance, and Tunisia to face persistent fiscal and external constraints.
The EBRD warned that prolonged instability could weaken investment, tourism and trade across the region while raising borrowing costs, particularly for countries with high debt burdens and limited fiscal space.
