The GDP was expected to decline to 4.8 percent due to the current escalating regional conflict, as it disrupted supply chains and increased oil prices, but it rose to 5.3 percent during the first half of the fiscal year, Madbouly said.
The annual growth rate is expected to reach 5.2 percent by the end of FY2025/2026, up from the initial target of 4.5 percent at the beginning of the fiscal year.
Egypt is also targeting economic growth of 5.4 percent in the upcoming FY2026/2027 budget. The International Monetary Fund expects Egypt’s growth to slow to 4.2 percent in 2026 before recovering to 4.8 percent in 2027.
The ongoing regional conflict has caused wider economic spill-overs, leading to high inflation, increased energy and food prices, trade flow disruptions, and a fluctuating currency, which continue to weigh on the economy.
Egypt is part of the IMF’s Extended Fund Facility (EFF) loan programme, which is scheduled to conclude by mid-December 2026. The seventh review is scheduled for 15 June 2026, and the eighth and final review will take place on 15 December 2026.
The IMF warned that disruptions in global trade, volatile commodity prices, and tighter financial conditions could worsen Egypt’s external balances, increase capital outflows, and raise borrowing costs.
Non-oil activity grows
Non-oil sectors also recorded growth during the third quarter of FY2025/2026. The Suez Canal recovered gradually during the quarter, growing by 23.6 percent. The telecommunications sector grew by 18.9 percent, the restaurants and hotels sector by 8.3 percent, and the construction sector by 5.6 percent, Minister of Planning and Economic Development Ahmed Rostom said during the weekly cabinet meeting.
The state is targeting an increase in non-oil exports to $100 billion by 2030, Minister of Industry Khaled Hashem said during the press briefing, in line with the National Industrial Strategy, which is currently under review.
The industry ministry has also identified 17 priority industrial sectors, including ready-made garments, textiles, food industries, automotive, electrical and engineering equipment, electronics assembly, and pharmaceuticals.
The aim is to expand the sectors, increase foreign investments and competitiveness in global markets, and support sustainable economic growth by adopting practical measures to support production and investment.
This aligns with a target to raise the industrial sector’s contribution to GDP from 14 percent to 20 percent by 2030, as part of Egypt’s Economic Development Narrative, where industry is one of five priority sectors.
Non-oil industrial activity also grew by 2.1 percent during Q3 of FY2025/2026. Strong increases were recorded in several industries, including wood products (60 percent), motor vehicles (27 percent), chemical products (10 percent), pharmaceuticals (8 percent), and paper and food industries (4 percent), according to Rostom.
The government has completed the listing of 12 state-owned companies on the Egyptian Exchange (EGX), while another 8 to 10 companies are expected to be listed within the next two months as part of the IPO programme aimed at increasing private sector participation in the economy, the prime minister said.
Around 10 additional companies in the petroleum sector are also currently undergoing listing procedures, Madbouly confirmed.
In total, more than 30 state-owned companies are expected to be listed on the EGX.
Energy sector developments
Furthermore, the state’s drilling and wells exploration efforts, especially during March and April 2026, led to higher production in the oil and gas sector.
Madbouly stated that Egypt has also managed to pay its arrears to foreign petroleum partners; total outstanding payments have reached $714 million, down from over $6.1 billion in June 2024.
According to Madbouly, the remaining amount is to be repaid before the end of the current FY, which ends on 30 June 2026.
Several international companies are planning to invest a total of $19 billion in Egypt’s petroleum sector over the next three years.
Approximately $8 billion was allocated from Italian firm Eni, $5 billion from British Petroleum (BP), $2 billion from the UAE’s Arcius Energy, as well as $4 billion from the US’s Apache Corporation, the prime minister said.
The government has also raised its renewable energy target to 45 percent of Egypt’s energy mix by 2028, up from the previous target of 42 percent by 2030.
Egypt is also preparing an initiative to encourage existing factories and residential units to install rooftop solar systems. It is also considering requiring new factories to allocate a portion of their energy consumption to renewable sources as part of the green transition.
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