Egypt Growth Outlook Cut to 5 Percent as Inflation Delays Rate Cuts

Egypt's growth outlook has been revised downward to 5 percent for the fiscal year 2026/27, as persistent inflation and regional risks have forced the Central Bank of Egypt to delay full interest rate easing into 2027. The downgrade, issued by BMI, a unit of Fitch Solutions, comes after the central bank revised its own projections, now expecting growth of 4.9 percent for fiscal year 2025/26 and 4.8 percent for fiscal year 2026/27.

Egypt's inflation remains a significant challenge, with average inflation forecast at roughly 14 to 17 percent in 2026 and about 11 to 13 percent in 2027, well above the 7 percent target band. Despite rebounding to 4.4 percent growth in fiscal year 2024/25, quarterly growth has moderated, and external forecasters project medium-term growth to rise towards 5.7 percent by fiscal year 2027/28.

The IMF's 8 billion US dollar Extended Fund Facility, running until late 2026, and a linked facility by early 2026, are crucial in supporting Egypt's macroeconomic stabilization efforts, but also raise concerns about the impact on low-income households and the central bank's ability to anchor inflation expectations.

Brief written by urgent.news from The Rio Times's own syndicated text. Machine-written — may contain errors; check the original before relying on it.