CAIRO (Reuters) -Egypt’s economy is forecast to grow 4.6% in the fiscal year to next June as inflation and interest rates continue to fall and a weaker currency boosts exports, a Reuters poll showed on Monday.
Growth in gross domestic product is projected to accelerate to 4.9% the following year and to 5.3% in 2027/28, according to the median estimate of 16 economists surveyed October 6-20.
Growth slumped to 2.4% in 2023/24, but rebounded after March 2024, when Egypt sharply devalued its currency and raised interest rates as part of an $8 billion financial support package with the International Monetary Fund.
The currency devaluation led to a surge in tourism and remittances from Egyptians working abroad.
The economy was also boosted in February 2024 by a $35 billion real estate investment by Abu Dhabi at Ras El Hekma on Egypt’s Mediterranean coast.
This month the central bank said growth accelerated to 5.0% in the second quarter of 2025 from a year earlier, from 4.8% in the first quarter.
Capital Economics said lower inflation and a looser monetary policy were boosting growth.
“Egypt’s economy is shifting into a higher gear as improved external competitiveness aids exports and the domestic manufacturing sector,” it said in a note last month.
The poll forecast average inflation, which has declined from a record high of 38.0% in September 2023, would drop to 12.3% in 2025/26, 10.2% in 2026/27 and 7.5% in 2027/28.
Egypt’s annual inflation slowed to 11.7% in September from 12.0% in August. Last week the government raised prices on a wide range of petroleum products by 10.5% to 12.9% as it tries to reduce its subsidy bill and ease its budget deficit.
Interest rates are also predicted to ease, the poll found. The Central Bank of Egypt’s overnight lending rate, now at 22.0%, is forecast to decline to 16.00% by the end of next June, 13.00% the following year and 11.25% in June 2028.
The central bank has cut its benchmark rate four times this year for a cumulative drop of 625 basis points.
Analysts expect the Egyptian pound to weaken to 49.85 to the dollar by the end of June 2026 from its current 47.50 pounds. It will further weaken to 52.00 as of the end of June 2027 and 54.00 at the end of June 2028, they predicted.
(Other stories from the Reuters global economic poll)
(Polling by Shaloo Shrivastava and Anant Chandak; writing by Patrick Werr; editing by Susan Fenton)
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