The International Monetary Fund outlined the key factors behind its decision to revise downward its growth projections for Egypt, pointing to rising energy costs and heightened geopolitical uncertainty as primary drivers of the slowdown.
The explanation came as part of the latest edition of the World Economic Outlook released during the Spring Meetings of the IMF and World Bank in Washington.
Speaking at the briefing, Petya Koeva Brooks, Deputy Director of the IMF’s Research Department, said Egypt, being a net energy-importing economy, is particularly vulnerable to current global developments.
She noted that higher oil prices are expected to erode real household incomes, reducing purchasing power and weighing on consumption, a key driver of economic activity.
Beyond household consumption, the IMF highlighted that elevated geopolitical uncertainty linked to the Middle East conflict is also dampening investor confidence. This, in turn, is expected to slow down investment decisions and overall economic momentum in the coming period.
The Fund emphasized that these combined pressures are not limited to 2026 but are likely to extend into 2027 as well, signaling a more prolonged adjustment phase for emerging economies exposed to external shocks.
In its updated projections, the IMF lowered Egypt’s expected economic growth to 4.2% for the current fiscal year, before a gradual improvement to 4.8% in the following year.
The downgrade reflects a broader reassessment of global growth conditions, with the IMF warning that tighter financial conditions, higher energy prices, and persistent uncertainty are reshaping the outlook for many developing economies.
The findings align with the IMF’s wider concerns that energy market disruptions and geopolitical tensions are increasing inflationary pressures globally while simultaneously constraining growth, particularly in countries dependent on imported fuel.
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