Egypt's economy: canal dollars, a floated pound and the price of bread

Where Egypt's foreign currency comes from

Four earners bring dollars into Egypt, and most of the country's recent economic history is a record of which of them faltered and when. Only the canal belongs to Egypt alone. Tourism and remittances both depend on people moving: visitors coming for the antiquities and the Red Sea resorts, and Egyptians going abroad to work, many of them, the BTI country report notes, in the oil-producing states. Oil and gas are the fourth, and Egypt now buys more of both than it sells.

What ships pay to cross the canal

The canal opened in November 1869 and runs without locks, so seawater flows freely along its 193.30 km from Port Said to Port Tawfiq. In 2008, 21,415 vessels passed through it and paid $5.381 billion between them, an average of $251,000 a ship. Egypt nationalised it on 26 July 1956, a story the history article tells from the sale of Egypt's shares in 1875.

In 2014 the government began widening the Ballah Bypass so that ships could pass in both directions at once, which nearly doubled capacity from 49 to 97 ships a day. The work cost more than LE 59.4 billion and was paid for with interest-bearing certificates sold only to Egyptians, yielding 12% and later 15.5%. The new channel opened on 6 August 2015.

Revenue for the fiscal year 2022/23 came to $9.4 billion, which Ahram Online calls a record. The same paper gives $10.2 billion for the calendar year 2023 and $4 billion for 2024, after tensions in the Red Sea sent shipping lines the long way round the Cape of Good Hope. For 2025/26 the authority's chairman reported $4.67 billion, 23% more than the year before, with transits up 10% and cargo tonnage up 22%, both still short of the targets set before the disruption. He put the return of ships down to falling insurance premiums. The BTI report counts the canal among the strategic assets the military controls.

How visitors and emigrants make up the rest

Tourism grew after 1975, when the government eased visa rules for nearly all European and North American countries. In 2010 arrivals reached 14.7 million, and the sector employed about 12% of the workforce and brought in 14.4% of foreign currency revenue. Each shock since has shown up in the count: the uprising of 2011 cut arrivals to 9 million by the end of that year, and the pandemic cut them to 3.5 million and revenue to $4 billion in 2020. Revenue was back at $14.1 billion in 2024, and the Ministry of Tourism and Antiquities counted nearly 19 million tourists in 2025, up 21%. The Grand Egyptian Museum at Giza, a $1 billion project paid for largely with loans from Japan, opened in full on 1 November 2025.

Remittances are the bigger flow. The emigration ministry counted 14 million Egyptians living abroad in 2023, against 2.7 million in 2013. Their transfers fell from $31.9 billion in the fiscal year 2021/22 to $22.1 billion in 2022/23 and recovered after the measures of March 2024 drew the money back into the banks. To keep it there the government has sold dollar savings certificates to emigrants and offered draft evaders and male students abroad a final exemption from conscription for $5,000 or €5,000.

How the pound lost its value

The State Information Service dates the approval of the Egyptian pound to 1834. It was pegged to sterling from the First World War and to the US dollar from 1962, and in 1970 one pound bought $2.30. Since then Egypt has repeatedly held a rate and then let it go. The structural adjustment programme of 1991 pegged the pound to the dollar and propped the peg up with high interest rates, a managed float followed in 2003, and after 2011 a black market for dollars grew up beside the official one. In November 2016, under an IMF programme, the pound was floated in full.

Between floats the central bank held the rate in practice; the BTI describes a costly de facto peg that lasted until the bank readjusted its policy in mid-2022. On 6 March 2024, citing foreign exchange shortages and a parallel market, its Monetary Policy Committee met in special session and raised the overnight deposit rate by 600 basis points to 27.25%, on top of 200 points in February. From then on, it said, market forces would set the exchange rate. The BTI notes that rates had last stood that high in 1991.

Inflation had already turned. It was 4.1% in April 2021 and 38.0% in September 2023, and it was down to 24.1% by December 2024. The IMF reported 11.9% for January 2026, then a rise to 15.2% in March 2026 on a weaker pound and dearer energy. The central bank's own series gave 13.9% for September 2026, against a target of 7%, plus or minus two percentage points, that it had set for late 2024, and the IMF said in July 2026 that reaching the target range had been pushed back by about a year.

Why Egypt keeps returning to the IMF

In 1977 the government, short of money, secured a standby arrangement with the IMF that required it to end subsidies on essential goods. Prices rose and the bread riots followed, after which, in the BTI's reading, the state put off serious reform until the 1990s. The adjustment programme signed with the IMF and the World Bank in 1991 opened the way to privatisation, and by 2005 the government had sold 209 of 314 public companies; exports of goods and services tripled between 2003 and 2008.

The uprising of 2011 drained the reserves, from $36 billion in December 2010 to $16.3 billion in January 2012. A $12 billion IMF loan came with the float of 2016, another programme followed in 2020, and the present Extended Fund Facility, worth $3 billion over 46 months, was approved on 16 December 2022. In March 2024 it was enlarged to $8 billion, inside a package of about $20 billion that included the European Union, the World Bank, Japan and the United Kingdom.

Gulf money came in larger sums. In February 2024 the government signed a $35 billion deal with the United Arab Emirates to develop Ras al-Hikma on the north coast, and the central bank recorded foreign direct investment of $46.1 billion in the fiscal year 2023/24 on the strength of it.

What the current programme has paid out

The Fund completed the fifth and sixth reviews together on 25 February 2026 and released about $2 billion, plus $273 million under a separate facility for climate reforms. Growth had reached 4.4% in the fiscal year 2024/25, and gross reserves had risen from $54.9 billion in December 2024 to about $59.2 billion in December 2025. The primary balance missed its target because the asset sales the programme counted on had not happened. The seventh review, on 30 July 2026, released about $1.8 billion more and took the total drawn to about $7.3 billion, and the board recorded growth of 5.2% over the first nine months of 2025/26. Both statements called progress on structural reform "uneven".

How much of the budget goes on debt

The BTI traces Egypt's debt stock from 73.7% of GDP in 2010 to 108.0% in 2017, down to 80.1% in 2019 and back up to 95.9% in 2023. Foreign debt rose from $48 billion in 2015 to $168 billion in 2023. Interest and repayments took 21% of government spending in the fiscal year 2010/11 and 56% in 2023/24, and the draft budget for 2024/25 set aside 62.1% for debt service and another 22% for state wages and subsidies.

Why the price of bread held for decades

Eish baladi, a round whole-wheat flatbread, comes with nearly every Egyptian meal. Its price has carried political weight since the standby of 1977: Britannica records demonstrations over economic hardship in the major cities on 18 and 19 January 1977, with nearly 100 people killed and several thousand injured or jailed. The price of subsidised bread was raised in 1989 and then held until August 2024, when, five months after the IMF programme was enlarged, the government raised it by 400%.

The wheat comes from abroad. Egypt grows wheat and maize but imports large amounts of both, chiefly from Ukraine and Russia, because subsidies and a preference for bread keep demand high on limited farmland. Farms cover the country's needs for vegetables, fruit, poultry, dairy, eggs and rice, and fall short in cereals, vegetable oils and red meat. The war in Ukraine raised the price of that wheat and kept away the Russian and Ukrainian tourists who made up a substantial part of the visitor count.

Food prices have forced emergency spending before. Inflation reached 15.8% in March 2008 and food inflation 23.7%, and the government answered with a pay rise of up to 30% for public employees. Under the current programme the adjustment has run the other way. Fuel prices went up several times in the period the BTI reviewed, and it expected fuel subsidies to end in January 2026. Two means-tested cash programmes, Takaful and Karama, reached about 4.7 million households, roughly 17 million people, by the BTI's count, and the national statistics agency put the share of Egyptians below the poverty line at 29.7% in 2020.

What Egypt grows on its irrigated land

Agriculture produces about 10% of GDP and employs about 18% of the workforce in the 2020s. It once carried the export trade: farm goods made up 87% of merchandise exports by value in 1960 and 11% in 2001, and cotton, the old cash crop, is no longer a large export. The fertile area came to about 3.6 million hectares in 2010, a quarter of it reclaimed from the desert after the Aswan High Dam was built. All of it is irrigated, and most of it carries at least two crops a year. One estimate put the dam's yearly benefit just after completion at E£255 million, E£140 million of it from farming, against a total cost of E£450 million.

The republic broke up the large estates. The land reform of 1952 capped ownership at 200 feddans, one feddan being 0.42 hectares, and the agricultural census of 1990 counted some three million holdings, almost 96% of them under five feddans. A tenancy law of 1992 set farm rents by the market; rents tripled and landowners could evict tenants after five years.

Most of the water arrives from outside Egypt. The State Information Service puts Egypt's share of the river at 55.5 billion cubic metres under the agreements it has signed and describes a country that "depends entirely on the Nile to meet its water needs". Ethiopia began building the Grand Ethiopian Renaissance Dam on the Blue Nile in 2011. At the Security Council on 8 July 2021 Sudan's foreign minister gave its reservoir as 74 billion cubic metres, and Egypt's foreign minister said Ethiopia refused to sign a legally binding agreement on filling and operating it. Ethiopia's minister told the same meeting that the dam carried the hopes of "65 million Ethiopians that have no access to electricity". In September 2025 Egypt wrote to the Council about Ethiopia's announcement that the dam was complete, which Egypt deems a violation of international law. The geography article sets out both positions, Ethiopia's economy article covers the dam as a power project, and this catalogue takes no side between them.

What Egyptian factories and mines make

How cotton and a national bank started industry

Muhammad Ali's state had 30 cotton mills employing about 30,000 workers by the 1830s, and the venture collapsed. A more durable start came in 1920, when the financier Talaat Harb founded Banque Misr with E£80,000 of capital, all of it Egyptian, and used it to launch companies in cotton ginning, paper, printing and shipping, along with EgyptAir in 1932. Britannica puts manufacturing at 10% of national output in 1950 and twice that by 1970.

Textiles continue that line. They earned about 12% of export income in 2023 and employed around 2.5 million people, and every stage from the cotton field to the finished garment happens inside the country. Egyptian cotton is known abroad mainly as Giza cotton, an extra-long staple variety. Mahalla El Kobra is the centre of the trade and of the state-owned Misr Spinning and Weaving Company, and qualifying industrial zones give goods that meet their rules of origin tariff-free entry to the United States.

What the newer plants turn out

Crude steel output was 10.7 million tonnes in 2024, and chemicals earned $8.4 billion in exports the same year. The pharmaceutical industry had 179 factories in 2025 against 130 in 2015 and supplied about 91% of the medicines Egyptians used that year, from raw materials about 90% imported. Vehicle production was about 95,000 in 2025, up from 37,000 in 2023, and 14 phone factories turned out 10 million handsets in 2025, up from 3.3 million in 2024. Gold comes chiefly from Sukari, near Marsa Alam, where production began in 2009, and gold exports reached $6.76 billion in the first ten months of 2025, against $2.63 billion a year earlier. All exports together came to $51.1 billion in 2023.

How Egypt turned from gas exporter to importer

Crude oil output peaked at 941,000 barrels a day in 1993 and fell to 630,000 by 2008, and the state shifted its attention to gas. By 2009, 38% of the gas produced was set aside for export. Consumption at home kept rising: the BTI dates Egypt's turn to net importer to 2012 for oil and 2015 for gas, while Wikipedia puts the oil date at 2008 to 2009. In the summer of 2014 blackouts lasted up to six hours a day, and the government put domestic supply first and signed a 15-year agreement to import 7 billion cubic metres of gas a year from Israel's Leviathan field.

Zohr, found by Eni in the Mediterranean in 2015, began producing in December 2017 and reached 2.7 billion cubic feet a day by August 2019; technical problems have since cut its output and sent Egypt back to imports. Oil exports fell from $13.8 billion in the fiscal year 2022/23 to $5.7 billion in 2023/24, mainly, the BTI says, because natural gas exports plunged, and power cuts caused by gas shortages were common in the same period.

Fossil fuels generated 88% of Egypt's electricity in 2023. The High Dam's generators supplied around half of Egypt's electric power when they first reached peak output in 1970 and about 15% by 1998. A nuclear plant at El Dabaa, which Russia agreed on 19 November 2015 to build and finance, poured its first safety-related concrete in July 2022.

Who owns the businesses the state and army run

The state employs about seven million people, and the BTI cites estimates that no more than three million are needed. A study by the Carnegie Middle East Center found that the army controls about 25% of public spending on housing and infrastructure. Military-run companies make cement and food and build roads and bridges, and the fuel distributor Wataniya and the mineral-water bottler Safi are both military-affiliated. In the BTI's account the military's businesses sit outside the competition authority's jurisdiction and hold advantages in land, tax exemptions and cheap conscript labour.

Egypt drew up a State Ownership Policy Document with the IMF in 2022, naming industries the state would leave within three years. In December 2024 the government announced stakes in ten companies for sale in 2025, among them Wataniya and Safi. By July 2026 the IMF counted divestment proceeds of about $520 million and said the programme was moving more slowly than planned.

Much of the work happens outside the formal economy. The informal sector produces between 40% and 50% of GDP by the BTI's estimate, and the International Labour Organization counted 71.3% of all employment as informal in 2023. Official unemployment was 7.3% that year. About 900,000 young Egyptians come onto the labour market every year, and 18.6% of women were in the labour force in 2023 against 71.3% of men.

The New Administrative Capital east of Cairo was announced in March 2015, and the government finished moving its ministries there in 2023. By its developer's account in October 2026 the state pays about EGP 7 billion a year in rent, and the city had about 30,000 permanent residents against a target of 250,000 within three years.