• Egypt’s economic growth is expected to slow to 4.9–5.1% this fiscal year due to ongoing regional tensions and global market disruptions.
• The rising inflation projected at 13% as fuel, electricity, and transport costs increase, challenging household consumption and purchasing power.
• The government implements measures including limited fuel price hikes, remote work, and adjusted business hours to stabilize markets and support citizens.

Geopolitical Pressures

The ongoing Iran conflict is placing pressure on the economy on a global scale. The disruption in shipping, energy flows and overall market uncertainty is placing pressure on markets globally. For the region, this means rising energy costs means increasing pressure on a macroeconomic level. But what does this mean for Egypt’s economy? 

In a cabinet meeting, Egypt’s Minister of Planning and Economic Development, Ahmed Rostom, confirmed that Egypt’s economic growth could slow to between 4.9% and 5.1% during the fiscal year due to the Iran war.

Fitch Solutions

Additionally, previously, Fitch Solutions lowered its forecast for Egypt’s economic growth in the current fiscal year to 4.9%, down from around 5.2%, due to the war’s repercussions. This revision reflects external pressures, including the conflict in Iran, which has affected trade supply chains, and investor sentiment.

The agency also indicated that if the conflict continues for an additional four weeks, growth could fall to 4.5%. Despite these adjustments, expected growth remains above the 2015–2025 average of 4.3%, indicating a continued moderate recovery.

The agency explains that slower growth is partly linked to weaker consumer purchasing power, which constrains domestic consumption. Inflation is projected to rise to 13% in 2026, compared with 11.7% previously. Government actions, including modest fuel, gas, electricity, and transport price increases, aim to mitigate the impact on households.

It also noted that higher import costs due to rising shipping prices adds inflationary pressures on consumers. Nevertheless, government interventions aim to keep the situation under control and maintain market stability.

To ease pressures, authorities introduced several measures: remote work every Sunday starting April, limited price hikes on fuel and gas, and adjusted store and mall operating hours, closing at 9 PM for one month. These steps are designed to regulate consumption while supporting the ongoing economic recovery.