Standard Chartered Bank expects the US dollar exchange rate against the Egyptian pound to decline to around EGP 49 per dollar by the end of 2026, as global market conditions improve and investor confidence returns.
Badr El-Sarraf, an economic analyst at Standard Chartered, said the Egyptian pound is expected to strengthen toward the end of the year if the Iran war comes to an end and global risk appetite improves.
Speaking during the launch of the bank’s report on Egyptian and global economic outlooks in Cairo, El-Sarraf estimated that Egypt experienced capital outflows of around $10 billion to $12 billion during the Iran conflict period.
He said that once international market tensions ease, foreign investors are expected to return to Egyptian markets.
El-Sarraf identified the government’s fiscal position as the main challenge facing the Egyptian economy, noting that the Ministry of Finance has significant debt obligations that must be repaid.
He highlighted that interest payments account for around 70% of government revenues, warning that if this ratio does not gradually decline, fiscal pressures will remain a structural challenge.
The analyst said Egypt has implemented broad reforms related to monetary policy, a flexible exchange rate system, and investment regulations, helping attract more foreign direct investment to the region.
Standard Chartered expects Egypt’s economic growth to slow to around 3.6% in 2026, while remaining less affected than some other regional economies impacted by the Iran war.
Growth is expected to recover gradually, reaching approximately 4.7% in 2027.
The bank also expects inflation pressures to remain a concern, with average inflation projected at around 13%–14% in 2026, rising to 14%–15% in 2027.
There is also a possibility that inflation could reach mid-teens levels toward the end of 2026, particularly in November and December.
Standard Chartered expects the Central Bank of Egypt to keep interest rates unchanged during 2026 to allow more time to assess inflation trends.
El-Sarraf said Egypt continues to represent an attractive investment opportunity, although fiscal challenges remain.
For foreign investors, Egypt remains appealing due to relatively high returns, which are among the most attractive in the Middle East and North Africa region.
He added that energy developments remain a key factor to monitor as oil prices rise again, while tourism revenues remain strong and remittances from Egyptians abroad continue to support the economy.
The analyst also described Egypt’s announcement that it had cleared outstanding dues owed to foreign oil and gas partners as a highly positive development, saying the cost of settling arrears is far lower than the economic impact of supply shortages or increased reliance on imports.
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