Egypt

Egypt enters 2026 as a stabilising-but-fragile macro story underpinned by the most aggressive external rescue in its modern history. After the March 2024 float of the pound and the augmentation of the IMF facility to roughly $8bn, growth recovered to about 4.4% in FY2024/25 and accelerated toward 5.3% year-on-year in early FY2025/26. The structural catalyst was the UAE's ADQ-led $35bn Ras El Hekma deal — the largest FDI commitment in Egyptian history — which lifted national FDI to roughly $46.6bn in 2024 and made Egypt the single largest driver of Africa's inflows.

The thesis rests on endowments no peer can replicate: control of the Suez Canal, a domestic market exceeding 109 million people, an established gas and petrochemical complex, a fast-growing fintech ecosystem, and Mediterranean coastal land monetised through Gulf sovereign capital. Disinflation is the second leg — headline inflation has fallen to roughly 15% from a 2023 peak above 35%, with the central bank cautiously easing from a 19% policy rate.

The risks are structural. External debt has climbed toward $164bn and interest payments consume an outsized share of the budget; the military's opaque economic footprint complicates the IMF-mandated divestment agenda; and Egypt is acutely exposed to regional spillover — Suez Canal revenue roughly halved in 2024–25 as Red Sea disruptions cut transits, while falling gas output has flipped the country from LNG exporter to record importer. The bet is that reform momentum and Gulf/EU backstops outrun the debt and geopolitical drag.