Egypt is stepping up economic and structural reforms to strengthen the economy's competitiveness and attract greater private-sector investment amid continued regional challenges, Minister of Planning and Economic Development Ahmed Rostom said during a meeting with a delegation from Fitch Ratings. The meeting was held to review Egypt's latest macroeconomic indicators and fiscal performance ahead of the country's credit review.
The government is seeking to create a more attractive business environment for local and foreign private-sector investors, with a focus on labor-intensive production and export-oriented sectors. In October 2025, Fitch affirmed Egypt's Long-Term Foreign-Currency Issuer Default Rating at "B", with a Stable Outlook, citing stronger foreign reserves, a narrowing current account deficit, and sustained support from Gulf and multilateral partners.
During the meeting, Rostom underscored the recent recovery in the Egyptian economy during FY2025/2026, which ended in June, as GDP growth reached 5.1 percent, up from 4.4 percent in the previous fiscal year. This growth was driven by an increase in value-added productive and service sectors. The transport and logistics sector also showed resilience, with continued growth in Suez Canal revenues and activity despite regional conflict affecting maritime traffic.
Fitch warned in its last rating that any future downgrade could result from deteriorating external balances or heightened regional conflict, while sustained reserve accumulation, stronger fiscal consolidation, and deeper reforms could support an upgrade. Other credit rating agencies have also attributed the easing of pressure on Egypt's external position to stronger foreign reserves, including Moody's Ratings and S&P Global Ratings.
Egypt's net international reserves jumped by $920 million in August to a record $57.2 billion at the end of the month, up 1.6 percent from $56.29 billion at the end of July. The country continues to implement structural reforms, which aligns with its objectives under the economic reform program with the International Monetary Fund (IMF), set to conclude in mid-December 2026.
The minister emphasized that the goal of continuing the reforms is not only to improve financial indicators but also to ensure that development and economic growth translates into a better standard of living for Egyptian citizens and higher-quality public services. Egypt's ability to absorb external shocks can help keep its current account deficit limited, with Fitch expecting the deficit to narrow further to 2.8 percent of GDP in FY2026/2027.
Egypt's commitment to implementing government reforms has placed inflation on a sustainable downward trajectory, reaching 12.7 percent in August 2026, down from 13 percent in July. Unemployment also declined to 5.8 percent during the second quarter of 2026, reflecting the economy's growing capacity to generate new and sustainable jobs and the labor market's stability.
Key points
- Egypt's economy grew by 5.1 percent in FY2025/2026.
- The country's net international reserves reached a record $57.2 billion in August.
- Egypt aims to reduce its debt to 78 percent of GDP.
