The International Monetary Fund has revised its growth forecasts for Egypt upwards to reach 5.4% in the fiscal year (FY) 2026/27, citing a positive shift in economic indicators. In its January 2026 World Economic Outlook Update, the IMF raised Egypt’s GDP growth projection for the FY 2025/26 to 4.7%, which represents a 0.2 percentage point increase from its October forecast. The outlook for the following FY 2026/27 was upgraded more significantly by 0.7 percentage points to 5.4%.
The revision for Egypt comes as the IMF projects growth in the Middle East and Central Asia to accelerate from 3.7% in 2025 to 3.9% in 2026 and 4.0% in 2027. This regional momentum is supported by higher oil output, resilient local demand, and ongoing reforms, with Saudi Arabia specifically projected to grow by 4.5% in 2026 and 3.6% in 2027. On a global scale, the IMF expects growth to remain resilient at 3.3% in 2026 and 3.2% in 2027, rates similar to the estimated 3.3% outturn in 2025. The 2026 global forecast marks a small upward revision of 0.2 percentage points compared with the October 2025 report.
The IMF noted that global performance results from a balancing of divergent forces where headwinds from shifting trade policies are offset by tailwinds from surging investment related to technology and artificial intelligence11. This technological surge is particularly evident in North America and Asia12. Global headline inflation is expected to decline from an estimated 4.1% in 2025 to 3.8% in 2026 and 3.4% in 2027, returning to target more gradually in the United States than in other large economies.
Growth in the United States is projected at 2.4% in 2026 and 2.0% in 2027, supported by fiscal policy and technology-driven investment incentives under the One Big Beautiful Bill Act of 2025. In China, growth for 2026 was revised upward to 4.5%, reflecting stimulus measures and a yearlong trade truce with the US that lowered effective tariff rates, though growth is expected to moderate to 4.0% in 2027 due to structural headwinds. India is expected to see growth moderate to 6.4% in 2026 and 2027 as cyclical and temporary factors wane following a strong 7.3% outturn in 2025.
The euro area is expected to see steady but subdued growth of 1.3% in 2026 and 1.4% in 2027, as it faces unresolved structural headwinds and benefits less from the recent technology-driven investment boost compared to other regions17. Sub-Saharan Africa is projected to see growth accelerate to 4.6% in 2026 and 2027, supported by macroeconomic stabilisation and reform efforts in key economies like Nigeria.
Risks to the global outlook remain tilted to the downside, as a reevaluation of productivity growth expectations about AI could lead to a decline in investment and trigger an abrupt financial market correction. Trade tensions could also flare up, prolonging uncertainty and weighing more heavily on activity. On the upside, rapid AI adoption could lift global growth by as much as 0.3 percentage points in 2026 if it translates into strong productivity gains and increased business dynamism. To foster stability, the IMF recommends that policies focus on restoring fiscal buffers, preserving price and financial stability, and implementing structural reforms without further delay.
