Egypt’s Debt Equation: Can Growth, Primary Surpluses and Lower Inflation Outrun the Financing Burden?

Report summary

Egypt has stabilised, and the stabilisation has now survived a regional war. Real GDP grew 5.1 percent in FY2025/26 on the Cabinet's outturn published on 3 September 2026, up from 4.4 percent a year earlier and above the 4.6 percent the IMF's seventh review, completed on 30 July 2026, had estimated for the year. Growth moderated to 4.7 percent in the fourth quarter, but manufacturing outside the oil sector, a Suez Canal recovery and petroleum refining lifted the full year result despite the regional shock. Headline inflation, 27.5 percent in June 2024 and 14.9 percent in June 2025, was on a downward trend before the war and rose to 15.2 percent in March 2026 on the exchange rate and energy prices; it eased to 14.3 percent in June, rose to 14.9 percent in July and eased to 14.5 percent in August, while core inflation climbed to 14.9 percent and moved above the headline rate, with the Central Bank of Egypt holding its overnight deposit rate at 19.00 percent on 20 August after 825 basis points of cuts between April 2025 and February 2026. Net international reserves rose to 57.21 billion dollars at the end of August from 56.29 billion in July, and remittances reached a record 47.3 billion dollars in FY2025/26, up 29.6 percent. This report asks the next question: whether the arithmetic of growth, primary surpluses and disinflation can now outrun the financing burden of the debt itself.