A Reuters poll showed that expectations for Egypt's economic growth remained broadly stable over the past three months, while inflation forecasts were revised upward, as the economy proved more resilient in the face of the Middle East war than initially feared.

According to the average forecasts of 15 economists polled by Reuters from July 7 to 16, Egypt's economy grew 4.8% in the fiscal year ending June, a slight increase from the 4.6% forecast in April.

Experts expect growth to slow to 4.5% in fiscal year 2026-2027, before accelerating to 5.3% in 2027-2028, compared with earlier forecasts of 4.6% and 5.5%, respectively. The forecasts also indicated growth of 5.5% in fiscal year 2028-2029.

Official data showed the economy beat expectations in the quarter from January to March, with initial estimates indicating GDP growth of 5%, exceeding previous forecasts, despite supply chain disruptions and rising oil prices due to the US-Israeli war on Iran.

The central bank forecast in May that average real GDP growth would reach about 5% for the fiscal year ending June, up from 4.9% forecast a month earlier.

Sources of foreign currency did not decline, with remittances from Egyptians abroad rising 31.2% to approximately $43.1 billion from July to May of fiscal year 2025-2026, up from about $32.8 billion in the previous year, while tourism revenues and Suez Canal earnings also recovered.

Foreign exchange reserves rose to $55 billion by the end of June.

The International Monetary Fund said in June it had reached a staff-level agreement with Egypt on two reviews, which could provide it with funding of $1.6 billion, describing the war's impact on the country's economy as 'relatively contained'.

However, the poll forecast average inflation at 13.5% in 2026-2027, an upward revision from April's forecast of 12%, before declining to 10.4% in 2027-2028 and 8.6% in 2028-2029.

The annual inflation rate in Egyptian cities fell to 14.3% in June.

Analysts polled expected the overnight lending rate to reach 16% by the end of fiscal year 2026-2027, down from a previous forecast of 17% three months ago, compared with the current rate of 20%.

Experts forecast the pound's exchange rate to reach 49 against the dollar by the end of fiscal year 2026-2027, down from 51.5 in previous forecasts. However, three analysts expected it to average 49.68 pounds per dollar by end-June 2028 and 50.49 pounds per dollar by end-June 2029.

Domenick Bartus, assistant economist at Moody's Analytics, said: 'Egypt's economy is still in an expansionary phase of the economic cycle, and it has weathered the external shock better than was feared in March,' but warned that uncertainty will continue to affect exports and investment.