HSBC economists struck an optimistic but cautious tone on Egypt’s economic outlook, saying sustained structural reforms could unlock strong long-term growth, potentially lifting expansion to as much as eight percent a year.
The assessment was shared with nearly 300 clients, business leaders and industry experts at HSBC’s annual Economist Roadshow in Cairo, which focused on global economic trends, regional prospects and their implications for Egypt amid a challenging international environment.
Speaking at the event, HSBC Global Chief Economist Janet Henry warned that inflation pressures remain stubborn despite easing in some economies, cautioning that financial markets may be overly optimistic about the pace of monetary easing.
“With sticky inflation and a relatively resilient economy supported by fiscal stimulus, markets still appear to be pricing in too many rate cuts in 2026,” Henry said.
Simon Williams, HSBC’s chief economist for Central and Eastern Europe, the Middle East and Africa, said recent policy adjustments in Egypt were laying the groundwork for recovery but stressed that reform momentum must be maintained.
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“It’s too soon to relax, but the rebalancing now underway opens the way for a proper recovery next year,” Williams said. “Over the longer term, structural reform is what really matters. If Egypt gets it right, it could be an eight percent growth story. Under-delivery, however, would cap growth and leave the economy vulnerable to new shocks.”
Opening the roadshow, Todd Wilcox, deputy chairman and chief executive of HSBC Bank Egypt, said the country was entering “a new chapter of stability and opportunity,” citing clearer policies and a more flexible operating environment.
“We are seeing renewed investor confidence across sectors and trade corridors,” Wilcox said, adding that the challenge now was converting confidence into sustained long-term growth.
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Background
Egypt has been implementing wide-ranging economic reforms under an International Monetary Fund-backed programme aimed at stabilising the economy, rebalancing public finances and restoring investor confidence after years of pressure from high inflation, foreign currency shortages and external shocks.
The government has set a target of seven percent growth by 2030 under its new economic narrative, which focuses on private-sector-led expansion, export growth and structural reforms.
Multilateral lenders have recently upgraded their outlook for Egypt. The IMF revised its real GDP growth forecast for the 2025/2026 fiscal year to 4.5 percent in its October World Economic Outlook, while the World Bank projected growth of 4.3 percent in FY2025/2026 and 4.8 percent in FY2026/2027.
Despite improving forecasts, economists say Egypt’s longer-term growth trajectory will depend on maintaining reform momentum, managing inflation and sustaining investor confidence in a volatile global environment.
