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Arab Finance: The Central Bank of Egypt (CBE) expects real gross domestic product (GDP) growth to accelerate at a faster-than-previously estimated pace, with the economy forecast to expand by an average of 5.1% and 5.5% in fiscal years (FYs) 2025/2026 and 2026/2027, respectively, as per the Monetary Policy Report for Q4 2025.
The upward revision reflects higher anticipated contributions from non-petroleum manufacturing and services, supported by projected progress in monetary easing and stronger real private sector credit growth.
Also, the CBE's Monetary Policy Committee (MPC) expects the inflation outlook to remain largely stable in the first quarter (Q1) of 2026, hovering near current levels, before resuming a broadly declining path over the remainder of the year.
Inflation is projected to converge toward the CBE’s target range of 7%, ±2 percentage points, in Q4 2026 and remain within single-digit levels thereafter.
The annual headline inflation is forecast to range between 12.0-12.5% in FY 2025/2026 and hit 9% on average in FY 2026/2027, down from 20.4% in FY 2024/2025.
However, the disinflation path remains constrained by planned fiscal consolidation measures, including energy price increases, as well as the persistence of non-food inflation.
In addition, the CBE anticipates a rebound in Suez Canal activity during the current FY, assuming the normalization of maritime traffic in the Red Sea following the recent Gaza peace deal, which has restored confidence and encouraged major shipping lines, including Maersk and CMA CGM, to resume transit through the canal.
