Egypt

The Egyptian Central Bank most recently received an additional US3.5bn transfer from Qatar under a development deal for a luxury real estate and tourism project on Egypt’s Mediterranean coast, part of a total package valued at US7.5bn. This was the latest transfer following the UAE’s USD35bn transfer in 2024. In late 2025, the IMF also reached a staff level agreement with Cairo on a 5th and 6th review of its program, which should release two new tranches of the US8bn program.  

Egypt’s external position is expected to slightly improve but remain negative at -4.3% in 2026, after -5.1% in 2025. Energy imports and still low gas exports were an important contributor of the external gap, as Egypt continued to be a net gas importer. In addition, Suez Canal traffic did not increase (when it does, an extra US8bn could flow into the country). On the bright side, remittances grew by 42% between January and October 2025, reaching US33.9bn, driven by strong economic performance in the Gulf region. 

Fiscal performance remained clouded by interest payments as the overall balance stood at -10% in 2025. It is expected to slightly improve to -8% in 2026. Meanwhile, the primary balance remained at a surplus at 3.5% of GDP. Government revenues continued to improve, even though they remained below international standards as tax to GDP stood at 12%.

In 2024, Egypt’s total public debt stood at 97% of GDP, among the highest historically, since Egypt has entered a fast debt-reduction period, decreasing the debt-to-GDP ratio above 5% annually. It is expected to reach 80% in 2027. These efforts have begun to ease Egypt’s financing pressures: Credit default swaps declined by more than -50% through 2025 and government yields declined by -22% during the same period. As a result, credit rating agencies started to upgrade Egypt’s outlook.  In October 2025, Egypt tapped international markets via a US1.5bn dual-tranche sukuk issuance. It has also been reported that Egypt is exploring the issuance of a Eurobond of up to USD4bn in the 2026/27 period. Egypt continues to have large liquidity challenges as it faces maturities of up to 7% of its external debt in 2026 and 2027.

Egypt’s main challenge remains sustainable growth in the mid and long term to provide employment and prosperity to a population projected to almost double by 2050. Cairo is expected to grow by 10mn people in the next 25 years. Under the current 2030 plan, the Egyptian leadership has defined energy, both renewable and natural gas, as well as agriculture and manufacturing as the top economic drivers. Regarding energy, Egypt has been working with European partners to become a regional energy hub, including a pipeline linking Greece to Egypt, an agreement with Turkey to supply LNG and electricity interconnector to provide up to 3GWs to Italy. 

The Egyptian president maintains tight control over institutions, backed by the army, but the autocratic governing system poses an underlying risk of social unrest. While the economy is improving, social unrest should not be fully dismissed. Other countries in the region, such as Morocco, have faced severe protest despite strong economic growth, demanding better social services. Going forward, rising social discontent related to high youth unemployment, low purchasing power, the currency depreciation and disagreements with the leadership might trigger revolts seeking institutional change. Security risks related to latent conflict in the Levant, Libya, Sudan, Yemen and the horn of Africa also weigh on the downside.