Egypt

Egypt is at a transformative point in its economic development.

As a lower middle-income nation with abundant potential, Egypt has made significant progress through ambitious structural and macroeconomic reforms. Its diverse economy—anchored by agriculture, manufacturing, and services—benefits from a large domestic market, strengthened infrastructure and a strategic location at the crossroads of Africa, Asia, and Europe.

Recent reform initiatives have focused on restoring macroeconomic stability, enhancing competitiveness, and strengthening social protection, and these efforts are beginning to yield real results. However, sustaining this positive momentum is crucial. Egypt continues to face structural challenges and economic vulnerabilities, exacerbated by global shocks, regional tensions, and climate change.

Deepening and accelerating reforms will be vital to building resilience, unlocking private sector growth, and ensuring that economic gains translate into improved living standards for all Egyptians.

Egypt has made progress toward macroeconomic stabilization and began addressing key constraints to growth, through broader fiscal consolidation commitments, tax reforms, and more reliable infrastructure. Still, the conflict in the Middle East raises risks to external accounts via capital outflows, higher oil import costs, and potentially weaker tourism receipts and remittances, which could slow the recovery.

Real GDP grew 5.3 percent in the first half of FY26 (July–December 2025), up from 3.9 percent a year earlier. This reflects base effects in non-oil manufacturing (due to better access to foreign exchange and imports), the Suez Canal's gradual resumption of maritime traffic, and robust activity in tourism and communications. Extractives remained a drag, reflecting the sector’s outstanding arrears.

Labor market conditions improved, with employment at 43.8 percent and labor force participation rates at 46.7 percent in Q2 FY26, though both remain below historical averages.

Inflation fell from a peak of 38 percent in late 2023 to 13.4 percent in February 2026. This enabled cumulative policy rate cuts of 825 basis points between April 2025 and February 2026. Inflation has an impact on household purchasing power. World Bank estimates indicate that the national poverty rate was 33.5 percent in 2021/22, and that poverty—measured using the lower-middle-income country (LMIC) international poverty line (US$4.20/day in 2021 PPP terms)—increased by about five percentage points between 2022 and 2024.

The primary surplus reached 3.5 percent of GDP in FY25, supported by tax revenue gains and spending restraint, and central government debt declined to 82.5 percent of GDP at end-FY25 (from 90.1 percent at end-FY24). However, interest payments remain high (10.6 percent of GDP), limiting fiscal space. Official foreign reserves and other foreign currency assets reached US$67.5 billion as of end-February 2026, up from US$59.7 billion a year earlier. However, they are likely affected since the conflict in the Middle East escalated, with portfolio outflows estimated at US$6.1 billion during the first half of March 2026.

Near-term prospects indicate challenges to the nascent recovery. Real GDP growth is projected at 4.3 percent in FY26 (from 4.4 percent in FY25 and 2.4 percent in FY24).

Overall, stabilization has strengthened buffers, but regional spillovers pose risks to the outlook, underscoring the need to deepen reforms and protect priority social spending. Achieving job-rich growth and improved socioeconomic outcomes in the medium term requires strengthening fiscal institutions, advancing the “business ready” agenda, and human capital development.

The World Bank’s operations in Egypt include:

• The "Generating Resilience, Opportunities, and Welfare for a Thriving Egypt" Development Policy Financing (DPF) operation with the Government of Egypt was approved in June 2024 for $500 million. This budget support operation is designed to address Egypt's immediate economic challenges while advancing structural reforms aligned with the country’s development priorities and national strategies. Specifically, it aims to enhance economic competitiveness and improve the business environment to foster private sector growth, strengthen macroeconomic and fiscal resilience, and support Egypt's green transition. This DPF is the first in a series of three programmatic operations. Key reforms under this operation include: strengthening the governance framework for state-owned enterprises by establishing a legal foundation for the State Ownership Policy; empowering the Egyptian Competition Authority to combat anti-competitive mergers and acquisitions; enhancing domestic revenue mobilization through accurate payroll tax assessments; reducing losses in electricity distribution; improving climate adaptation capacity and the financial sustainability of the water and sanitation sectors; scaling up renewable energy; and creating a regulatory framework for a voluntary carbon credit market. This operation will contribute to creating sustainable jobs and building resilience to climate change, both of which are crucial for the prosperity of Egypt's citizens, particularly the poor and vulnerable.

• The World Bank has supported the government in designing and scaling up social safety net programs under the Strengthening Social Safety Nets Project ($900 million, including additional financing). The project supported government efforts to enhance the efficiency and effectiveness of the Takaful and Karama Cash Transfer Program (TKP), implemented by the Ministry of Social Solidarity (MOSS). It also piloted productive inclusion and graduation models in eight governorates under the "FORSA" program. The support continues through a $500 million loan under the “Takaful and Karama Cash Transfer Expansion and Systems Building Project”, which supports efforts to increase the coverage and effectiveness of TKP, expand its social registry to support effective targeting of social protection programs, and enhance access to microcredit. As of December 2025, 4.66 million households have benefited from Takaful and Karama.
• The Upper Egypt Local Development Program ($500 million), which closed in October 2025, has strengthened local government capacity for quality infrastructure and service delivery to citizens and local firms in four of Egypt’s poorest governorates, home to around 20 million people. Citizens in 20 cities, 400 villages, and 2,970 sub villages have benefited from the expansion and improvement of municipal services and infrastructure — including water and sanitation, local markets, vocational areas, local roads, public spaces, and solid waste management. More than 79,427businesses have benefited from upgraded infrastructure and services, as well as support through 12 cluster programs focused on handicrafts, agribusiness, and other sectors. A total of 8.2 million citizens, 48% of them women, have benefited from 5,130 infrastructure projects under the program.
• The Emergency Food Security and Resilience Support Project's($500 million) emergency response measures, from December 2022 to February 2023, played a crucial role in addressing the country’s shortfall in wheat imports and ensuring the Bread Subsidy Program's uninterrupted operation. The Project is supporting the Ministry of Supply and Internal Trade’s efforts to reduce post-harvest losses in the wheat supply chain by upgrading, expanding and establishing wheat silos strategically located near road, rail and river transportation routes in Upper Egypt. The project is also supporting the Ministry of Agriculture and Land Reclamation  in seed multiplication and production capacity enhancement at the Sakha Agricultural Research station. Additionally, 10 agricultural service centers in ‘Decent Life’ initiative Villages in Upper Egypt will be upgraded with equipment, including agro-meteriological stations to support the provision of climate informed extension services.
• The Sustainable Rural Sanitation Services Program ($850 million, with $300 million co-financing from the Asian Infrastructure Investment Bank), aims to bring sanitation access to about 1.73 million people  through a complete sanitation chain from household connections connected to functioning  wastewater treatment facilities. The program empowers and incentivizes local water and sanitation companies to deliver effective, inclusive and accountable decentralized services. Currently over 1 million people already having access to improved sanitation services.  Six  water and sanitation companies, serving 34 million citizens, have also significantly enhanced their performance.
• The Inclusive Housing Finance Program ($1 billion, including Additional Finance) aims to improve the affordability of formal housing for low-income households in Egypt. It will also strengthen the Social Housing and Mortgage Finance Fund’s capacity to design policies and coordinate programs in the social housing sector. The program is a top priority for the Egyptian authorities, with an 85% disbursement ratio. Since program inception, over 700,000 subsidies have been delivered to low-income households across Egypt’s 27 governorates.  This has contributed to greater social and youth inclusion. Over 25% of the beneficiaries are women (with 90% of women beneficiaries being first-time borrowers), 52% are below the age of 40, and 18% are below the age of 30. In addition, 65% of beneficiaries are first-time borrowers, having never engaged with a financial institution prior to the initiation of this program. The program is also piloting the inclusion of green building initiatives in social housing, with the aim of certifying 55,000 units as green under national and international certification standards (including IFC EDGE). So far, over 40,000 units have been green certified. The Program has also generated over 3.8 million jobs directly and indirectly through the construction sector.
• The Transforming Egypt’s Healthcare System Project  ($530 million) is designed to enhance healthcare services and address public health challenges in Egypt. Its objectives include improving healthcare service quality, boosting demand for health and family planning services, combating Hepatitis C, and providing a rapid response to crises or emergencies. Notably, the project backed the "100 Million Healthy Lives" campaign, which screened individuals for Hepatitis C and other noncommunicable diseases, leading to the treatment of approximately 1.2 million Hepatitis C patients contributed to the elimination Hepatitis C in Egypt. Initiatives such as the National Community Health Worker Campaign, the Al Wissam Initiative, and the Visiting Doctors Program have been instrumental in raising the national contraceptive prevalence rate from 58% in 2018 to 66% in 2022. The project also supports secondary and tertiary level initiatives to improve the quality and timeliness of surgical care, strengthen national blood banks, as well as address shortages of medical goods and supplies throughout Egypt.
• The Supporting Egypt’s Universal Health Insurance System (UHIS) Project ($400 million) was approved in June 2020. The project supports Egypt to implement the new UHIS, as envisioned in the Universal Health Insurance Law passed in 2018.  The program has been rolled out in the six Phase 1 governorates, enrolling over 5 million people. A national quality accreditation standard has also been developed, and is being implemented, with over 322 providers accredited and contracted to provide services.
• In April 2019, the World Bank approved the  Catalyzing Entrepreneurship for Job Creation Project ($200 million) which aims to create jobs and improve economic opportunities for Egyptians, with a focus on women and youth. This project provides a comprehensive package of financial (debt financing and equity investments) and non-financial support to traditional MSMEs (Micro, Small and Medium Enterprises), innovative startups, and high growth firms. The project has created more than 400,000 jobs and supported more than 200,000 beneficiaries — of whom 40% are women and 40% are youth.
• The   Supporting Egypt Education Reform Project  ($500 million) supports the government in improving teaching and learning conditions in public schools. To improve the school readiness of the youngest learners, the project supported the Ministry of Education and Technical Education in conducting diagnostic studies and developing a new quality assurance system for kindergartens to guide quality enhancement across 35 percent of kindergartens in Egypt. Support has been provided to develop and roll out training modules to improve teaching practice for over 35,000 kindergarten teachers. To enhance teaching and learning, the project has supported the ministry in the development of performance standards for teachers and the development of a continuous professional development framework for Grade 1-6 teachers and supervisors, with a recent roll out of developed teacher training modules to over 100,000 teachers nationwide.  Additionally, the project has supported key student assessment initiatives, including the upcoming fourth and seventh-grade assessments, along with a number of education technology initiatives.
• The Railway Improvement and Safety for Egypt, RISE, Project ($440 million) was approved in March 2021, complemented by a $241 million contribution from the Egypt National Railways (ENR). The project will modernize the railway signaling along the Alexandria-Cairo-Nag Hammadi corridor of the ENR and help improve safety at select stations and junctions using a safe systems approach, which will include gender, citizen engagement, and disability considerations. The project will introduce reforms, using performance-based funding, in accordance with best international practice, to support ENR to deliver high quality services at a lower cost through the adoption of public service obligation and multi-annual infrastructure contracts. An estimated 1.4 million daily users of the railways will be able to rely on a safer and more reliable service.
• The Cairo Alexandria Trade Logistics Development Project($400 million) was approved in September 2022, complemented by a $598 million contribution from the Egypt National Railway. The project will improve the performance and support the decarbonization of the logistics and transport sectors in the Alexandria–6th October–Greater Cairo Area railway corridor. The project includes developing and adopting a transparent railway Infrastructure Access Charging scheme for the Egyptian railway network to attract private sector participation; developing a regulatory framework including identifying the detailed scope and responsibilities of a railway regulator and the associated governance framework; and identifying and developing additional rail‐friendly policies to increase traffic on the railway network.
• The  Greater Cairo Air Pollution Management and Climate Change Project ($200 million) supports investments and capacity development that contribute to reducing air pollution and climate change emissions in Greater Cairo. The project is helping develop an integrated climate and air quality management plan to guide future actions. Larger-scale investment activities are focused on building responsiveness and resilience into institutions and systems, with an emphasis on the two priority sectors of waste management and public transport. The project supports investments to eliminate a large source of waste pollution while making new investments to modernize waste management systems.  The project is also financing low/no emission e-bus transport fleet models.

The World Bank Group’s FY 2023-2027 Country Partnership Framework (CPF) for Egypt lays out the World Bank’s current strategy in the country.

Egypt Country Partnership Framework for the period FY2023 - FY2027

The CPF aligns with the Government of Egypt’s Sustainable Development Strategy, “Egypt Vision 2030,” and the National Climate Change Strategy 2050. The CPF builds upon a comprehensive set of World Bank analytics, including the Systematic Country Diagnostic, the Country Private Sector Diagnostic, and the Country Climate and Development Report. The CPF works towards three high-level outcomes:

1. More and better private sector jobs: through supporting the creation of an empowering environment for private sector-led investments and job opportunities as well as creating a level playing field for the private sector.
2. Enhanced human capital outcomes: through supporting the provision of inclusive, equitable and improved health and education services as well as effective social protection programs.
3. Improved resilience to shocks: through strengthened macroeconomic m anagement, and climate change adaptation and mitigation measures. The CPF also aims to strengthen Egypt’s role in regional integration through enhanced regional trade and greater connectivity in infrastructure, transport, energy, and labor.

Through the CPF the World Bank will also continue to support Egypt’s ambitions to be a leader for the climate mitigation and adaptation agenda in the region, following its presidency of COP27. Additionally, the CPF integrates two cross-cutting themes—governance and citizen engagement, and women’s empowerment— across programs. The CPF is being  implemented jointly by the World Bank, the International Finance Corporation (IFC, a member of the World Bank Group), and the Multilateral Investment Guarantee Agency (MIGA, a member of the World Bank Group), building on the three institutions’ current portfolios and adopting a flexible approach to lending. The CPF is being  supported through a financial envelope of $7 billion in lending ($1 billion per year from IBRD and about $2 billion during the entire CPF period from IFC), in addition to guarantees from MIGA. Partnerships remain a crucial component of the strategy.