OECD ECONOMIC SURVEY OF

EGYPT
Overcoming economic challenges and
improving long-term prospects
Paris, France
23 February 2024

oe.cd/egypt-eco
@OECDeconomy

@OECD
 The Egyptian economy has proved resilient in the face
of the COVID-19 shock but growth has slowed
Real GDP
Annual changes, %
12 12
Egypt Neighbouring countries
10 10

8 8

6 6

4 4

2 2

0 0

-2 -2

-4 -4
2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

Note: The “neighbouring countries” refer to a set of countries located in the same region: Algeria, Israel, Jordan, Lebanon, Morocco, Tunisia, and Türkiye.
Source: OECD, National Accounts database.
 Inflation has slowed but remains high and broad-based
Inflation
12-month rate, in %

60
Headline Core

40

20

0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Note: The Fiscal Year (FY) 2018/19 is the base year for consumer price weights.
Source: Central Agency for Public Mobilization and Statistics; Central Bank of Egypt.
 Foreign exchange reserves are low
Total reserve assets
In % of GDP, end-2022
50 50

40 40

30 30

20 20

10 10

0 0

Note: Total reserve assets include the reserve position in the IMF.
Source: Ministry of Planning and Economic Development; Central Bank of Egypt.
Growth will pick up
FY FY FY FY
2022/23 2023/24 2024/25 2025/26

Real GDP growth, % 3.8 3.2 4.4 5.1

Consumer price index, % 25.1 32.0 15.9 7.5

Central government gross debt, % of GDP 95.7 92.0 86.9 80.7

Note: Data refer to the fiscal years from July to June of the following year.
Source: OECD Economic Outlook November 2023.
 Monetary policy needs to remain restrictive until
inflation approaches the target
Policy interest rate

50 50
Egypt Morocco Türkiye Jordan
45 45
40 40
35 35
30 30
25 25
20 20
15 15
10 10
5 5
0 0
2016 2017 2018 2019 2020 2021 2022 2023 2024

Source: Central Bank of Egypt; and central banks of the referenced countries.
 Interest payments are set to rise due to weak investor
confidence
Budget balance and interest payments
% of GDP

Note: OECD projections for fiscal year 2023/24.

Source: Ministry of Finance, Monthly Finance Report, December 2023 and Budget Fiscal Year 2023/24; Ministry of Planning and Economic Development.
 A credible consolidation strategy is needed to reduce
public debt
General government gross debt
% of GDP, 2022 or latest value
283
200 200

150 150

100 100

50 50

0 0

Source: IMF, World Economic Outlook – October 2023 database.

Reviving
private sector
growth
 Faster labour productivity growth is needed to ensure
income convergence
GDP per worker
In thousands, 2015 USD PPPs

Egypt Neighbouring countries OECD

100 100
90 90
80 80
70 70
60 60
50 50
40 40
30 30
20 20
10 10
0 0
2001 2005 2009 2013 2017 2021

Note: The “neighbouring countries” refer to a set of countries located in the same region: Algeria, Israel, Jordan, Lebanon, Morocco, Tunisia, and Türkiye.
Source: IMF, World Economic Outlook – October 2023 database.
 Business dynamism should be revived
New firm entries
Per 1000 population aged 15-64, average of 2015-2020

18 18
16 16
14 14
12 12
10 10
8 8
6 6
4 4
2 2
0 0
India Egypt Jordan Greece Turkiye Viet Bulgaria Morocco Brazil Costa OECD China Chile OECD
Nam Rica avg top 5

Note: Firms here refer to limited liability companies. Data for Egypt cover 2015-22, data for Indonesia cover 2015-16. Averages chosen to smooth the impact of the pandemic in
2020 on business dynamism.
Source: General Authority of Investment and Free Zones; and World Bank, Entrepreneurship database.
 Removing regulatory barriers would improve the
business environment
Regulatory framework for entrepreneurship
0 (not burdensome at all) to 100 (extremely burdensome), 2019

Egypt Comparator countries OECD

100 100

80 80

60 60

40 40

20 20

0 0
Administrative Cost of starting Conflict of interest
requirements a business regulation

Note: The “comparator countries” refer to 17 countries for which the OECD has already produced at least one OECD Economic Survey and whose living standards are closest to
Egypt’s, namely: Brazil, Bulgaria, Chile, China, Colombia, Costa Rica, Greece, India, Indonesia, Malaysia, Mexico, Morocco, South Africa, Thailand, Tunisia, Türkiye, and Viet Nam.
Source: World Economic Forum (2019), Global Competitiveness Index 4.0.
 Reducing the weight of state-owned enterprises in the
economy would spur private sector activity
Public non-financial corporate sector
As a share of total output in %, 2021 or latest
25 25

20 20

15 15

10 10

5 5

0 0
United Kingdom Czechia Korea Costa Rica Slovenia Mexico Egypt
Note: Only a few OECD member countries report output with a breakdown of the non-financial corporate sector (S11) in a comparable way to that of Egypt: Costa Rica, Czechia,
Mexico, Slovenia, South Korea and the United Kingdom. Data refer to fiscal year 2021/22 for Egypt, 2017 for Korea, 2020 for Costa Rica, Czechia, and United Kingdom, and 2021
for Mexico and Slovenia.
Source: Ministry of Planning and Development; OECD, National Accounts database and OECD calculations.
 Lowering import tariffs would facilitate integration into
global value chains
Weighted mean applied tariffs
%

12 12

10 10

8 8

6 6

4 4

2 2

0 0

Note: Weighted mean applied tariff is the average of effectively applied rates weighted by the product import shares corresponding to each partner country. When the
effectively applied rate is unavailable, the most favoured nation rate is used instead. Data refer to 2019 except for Thailand (2015), Tunisia (2016), Israel (2017), Mexico (2018),
Jordan and Malaysia (2020).
Source: World Bank, World Development indicators.
 Competitive and transparent procurement procedures
would support the fight against corruption
Control of corruption
Index scale: -2.5 (worst) to 2.5 (best), 2022
1,5 1,5

1,0 1,0

0,5 0,5

0,0 0,0

-0,5 -0,5

-1,0 -1,0

-1,5 -1,5

Note: “Control of Corruption” is one of the World Bank’s Worldwide Governance Indicators. It captures perceptions of the extent to which public power is exercised for private
gain, including both petty and grand forms of corruption, as well as "capture" of the state by elites and private interests.
Source: World Bank, Worldwide Governance Indicators.
Promoting
better-quality
job creation
 Foster high-quality job creation for the growing and
increasingly better educated population
Working age population by education attainment
Million

80 80
No certificate Primary and lower secondary Higher secondary and post-secondary University or above
70 70

60 60

50 50

40 40

30 30

20 20

10 10

0 0
2000 2005 2010 2015 2020

Source: United Nations, Department of Economic and Social Affairs, Population Division; OECD calculation based on Assaad (2020).
 Reforms should aim at lifting employment rates,
especially for youth and women
Employment rates across countries
in %, 2022

80 80
Total working age population (15+) Female (15+) Youth (15-24)

60 60

40 40

20 20

0 0

Note: ILO standards, LFS based, including informal employment.

Source: World Bank, World Development Indicators.
 Measures to reconcile work and family responsibilities
would boost female employment
Female labour force participation rate
In %, 2022
80 80

60 60

40 40

20 20

0 0

Note: ILO standards, LFS based, including informal employment.

Source: World Bank, World Development Indicators.
 Further reducing the social security contribution rate
would facilitate formal job creation
Social security contribution rate
As a share of before-tax wages in %, 2022
45 45
Social security contribution rate
40 40
Egypt total: before the 2019 reform
35 35
30 30
25 25
20 20
15 15
10 10
5 5
0 0

Note: 2023 data for Egypt, 2019 data for Algeria, Brazil, Colombia, Costa Rica, Morocco, South Africa and Tunisia; 2018 data for Bulgaria, China, Greece, India, Indonesia, Jordan,
Lebanon, Malaysia, Thailand, Türkiye and Vietnam.
Source: International Social Security Association.
 Cash transfers to the poor should be expanded while
keeping them targeted
Cash transfers to the poor
As a share of GDP in %, 2022

3,5 3,5

3,0 3,0

2,5 2,5

2,0 2,0

1,5 1,5

1,0 1,0

0,5 0,5

0,0 0,0

Note: For Egypt, the benefits shown include the Takaful and Karama programmes.
Source: World Bank (2022) “Egypt Public Expenditure Review for Human Development”.
 Education spending should be prioritised
Total government expenditure on education
As a share of GDP in %, 2020 or latest

8 8
7 7
6 6
5 5
4 4
3 3
2 2
1 1
0 0

Note: Data refer to 2020, except for Brazil, Chile (2019), Mexico (2018) and Tunisia (2016).
Source: World Bank, World Development Indicators.
Accelerating
the green
transition
 Prioritise climate efforts where emission targets can be
reached more easily
Per cent change in the total volume of emissions since 2000

100 100
Egypt Neighbouring countries OECD
80 80

60 60

40 40

20 20

0 0

-20 -20

-40 -40
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Note: Emissions include carbon dioxide (CO2) emissions from fossil fuels and industry; land use change is not included. The “neighbouring countries” refer to a set
of countries located in the same region: Algeria, Israel, Jordan, Lebanon, Morocco, Tunisia, and Türkiye.
Source: Ritchie, Roser and Rosado (2020), “CO₂ and Greenhouse Gas Emissions”.
 Stronger private sector engagement is needed to
finance investment in emission reductions
Renewable energy
As a share of total energy supply in %

Egypt Neighbouring countries OECD

14 14

12 12

10 10

8 8

6 6

4 4

2 2

0 0
2000 2003 2006 2009 2012 2015 2018 2021

Note: The “neighbouring countries” refer to a set of countries located in the same region: Algeria, Israel, Jordan, Lebanon, Morocco, Tunisia, and Türkiye.
Source: OECD, World Energy Balances database.
 Better management of existing resources would help
address rising water scarcity
Water stress
Freshwater withdrawal as a proportion of available freshwater resources, %
160 160
2020 2000
140 140

120 120

100 100

80 80

60 60

40 40

20 20

0 0
Egypt Neighbouring countries OECD

Note: Water stress is defined as freshwater withdrawal as a proportion of available freshwater resources (adjusted for the amount of water required to sustain aquatic
ecosystems, with a minimum risk of degradation). The “neighbouring countries” refer to a set of countries located in the same region: Algeria, Israel, Jordan, Lebanon, Morocco,
Tunisia, and Türkiye.
Source: FAO, Aquastat.
 OECDEconomy
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Disclaimers:
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is
without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international
law. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of
international frontiers and boundaries and to the name of any territory, city or area. 27