Ahmed Kamel – Egypt Daily News
Egypt’s economic growth is projected to accelerate to 4.6 percent in 2026, up from 4.4 percent in 2025, according to the International Monetary Fund’s July 2026 World Economic Outlook Update. This figures represent a 0.4 percentage point upward revision compared to April projections, signaling robust short-term resilience despite intensifying regional headwinds.
However, the Washington-based lender revised Egypt’s 2027 growth forecast downward by 0.4 percent to 4.4 percent, reflecting prolonged global and regional crosscurrents. Domestically, Egypt anticipates completing its current seventh review under an eight billion dollar loan deal after reaching a staff-level agreement in June, with the programme scheduled to conclude in December.
The optimistic near-term outlook for Egypt stands in stark contrast to severe economic strain across the broader Middle East and North Africa region. Driven by protracted war and critical shipping disruptions surrounding the closure of the Strait of Hormuz, the IMF sharply downgraded MENA’s 2026 real GDP growth forecast by 1.6 percentage points, plunging the region into a contraction of -0.5 percent.
The IMF’s baseline projections assume a gradual reopening of vital trade routes starting in mid-July 2026, with conditions returning to a pre-war state by early 2027. Consequently, the lender anticipates a massive double-digit economic rebound for the region’s primary commodity exporters next year, pushing overall MENA growth to a soaring 7.3 percent in 2027.
Neighbouring Saudi Arabia is expected to navigate the crisis with growth forecasts of 1.7 percent in 2026 before accelerating to 5.5 percent in 2027. On the global stage, the IMF reports an economy caught in the opposing forces of war-induced supply shocks and a booming technology cycle.
Global output is projected to slow to three percent in 2026 before recovering to 3.4 percent in 2027, down from the 3.5 percent average recorded across 2024 and 2025. The impact varies widely as advanced tech hardware exporters see export booms, while commodity importers outside the tech value chain face significant softening.
Global disinflation has officially stalled due to the conflict, driven by a projected 32 percent spike in crude oil prices this year. With the global petroleum index now expected to average 89 dollars per barrel, global headline inflation is projected to rise to 4.7 percent in 2026 before easing to 3.9 percent in 2027.
The IMF notes that while commodity prices peaked in April 2026, they have since cooled significantly due to ceasefires and a memorandum of understanding between Iran and the United States. This diplomatic development has stabilized global oil expectations by encouraging countries to adjust their inventories under the assumption that supply shortfalls will be temporary.
The entire baseline economic forecast hinges on the success of this diplomatic track, assuming that the reopening of the Strait of Hormuz begins in mid-July 2026. Reflecting these developments, the IMF revised Iran’s 2026 growth upward by 0.7 percent compared to April, bringing it to -5.4 percent due to better oil export turns.
However, because the economic contraction this year was less severe than feared, the IMF adjusted Iran’s 2027 recovery growth downward to 2.9 percent. For the United States economy, the war has had a limited impact on domestic activity, with its status as a net energy exporter insulating it and holding its 2026 growth steady at 2.3 percent.
Despite current ceasefires, the IMF warns that the geopolitical situation remains highly fragile, noting that a renewed Middle East conflict looms large as the most imminent downside risk. If current agreements falter, it could trigger severe food insecurity in low-income nations, deeper supply chain disruptions, and intense balance of payments stress across vulnerable emerging markets.
