A report by American investment bank, Morgan Stanley has wittled down assumptions placing Egypt on higher external oil price vulnerability.
The report noted that with record remittance inflows and greater exchange-rate flexibility providing a crucial cushion against external shocks, making the country’s oil price vulnerability “materially lower in 2027. Lower energy costs would cut Egypt’s import bill and narrow the current-account deficit to $13 billion.
FDI is expected at $15 billion in FY2027, supported by oil and gas investments and the government’s asset-sale program. External financing needs of $25 billion would be nearly matched by $24 billion in sources, leaving a $1.4 billion gap. Multilateral financing of $4 billion would more than cover this, resulting in a $3 billion surplus.
In the bank’s second scenario, the base-case scenario, the Strait of Hormuz partially reopens, with Brent averaging $75 per barrel in late 2026 and $70 in early 2027.
Egypt’s current-account deficit would edge up to $14 billion, but strong remittances of about $43 billion would help absorb the higher energy costs. Net FDI is projected at $14 billion, while scheduled multilateral financing would broadly cover the external gap.
In the third scenario, Morgan Stanley assumes unresolved geopolitical risks, constrained oil flows through Hormuz, and elevated prices.
Brent is projected at $100 per barrel in Q3 2026, averaging $95 in H2 2026 and $80 in H1 2027. Egypt’s current-account deficit would widen to $17 billion, while net FDI would ease to $13 billion as uncertainty delays new commitments.
