The Iran war has cast its shadow on every country in the world without exception, forcing them to take measures to deal with a crisis that has shaken regional and global economies, Prime Minister Mustafa Madbouli told members of Egypt’s parliament this week.
He said the government is dealing with the war as an extended crisis that is likely to continue until the end of this year, and “we are preparing scenarios to address its economic impacts in a way that can protect the interests of our country and our citizens.”
Addressing the House of Representatives, the lower house of Egypt’s parliament, for the first time this year, Madbouli said the war against Iran, added to the other conflicts that have hit the region since 2023, has had repercussions on a global scale and had a deep impact on the international political and economic landscape.
The war poses unprecedented economic challenges in terms of energy supplies, supply chains, inflation rates, and the costs of shipping, he said, leading to immediate economic suffering for the region and the world.
“The price of a barrel of oil has spiralled from $69 before the war to $84, then to $93, before jumping to $120, then declining to around $95, with expectations that it will reach levels between $150 and $200 if the situation worsens,” Madbouli said.
He cited figures from the World Travel and Tourism Council putting the daily losses of the tourism sector at around $600 million due to flight cancellations and a decline in travel to the Middle East.
Egypt was prepared for the war and acted within the first hours of the crisis as one of at least 60 countries to take emergency measures in response to the global energy crisis, Madbouli said.
He said that a crisis committee had been formed in the early hours of the war, which undertook the task of conducting real-time monitoring of the rapidly evolving regional and international situation.
“Our response was not limited to monitoring, but rather took the form of a comprehensive package of proactive austerity measures that focused on securing energy needs, ensuring the continuity of supply chains, managing pressures on our local market, and enhancing financial stability, all thereby strengthening our economy’s ability to absorb shocks and maintain its resilience under these exceptional circumstances,” Madbouli said.
Throughout the two-month crisis, Madbouli indicated that there was daily coordination between the government and the Central Bank of Egypt (CBE) to provide for the country’s financial needs in foreign currency to secure food commodities and production supplies.
“Our monetary policy, based on the flexibility of the exchange rate and inflation targeting, has so far proved its success in absorbing the shocks of the Iran war,” he said.
In the midst of the regional crisis, the government made the decision to raise wages by 21 per cent and to increase the minimum wage for state employees to LE8,000 per month at a total cost of about LE100 billion, he added.
This came in addition to measures to rationalise government spending in terms of cancelling public events, reducing official travel, and cutting down fuel allocations for public vehicles by 30 per cent.
He said that the Iran war had caused an immediate and rapid rise in global energy costs, a fact which had forced the government to raise fuel prices.
“We are not fond of raising fuel prices as some allege, but this decision was a necessity to ensure our ability to meet local needs and keep factories operating,” Madbouli said, indicating that “the cost of imported natural gas saw an unprecedented rise and our monthly bill jumped from $560 million to about $1.65 billion, for example, an increase of $1.1 billion per month to secure the needs of electricity generation and industry.”
Madbouli said that as the Iran war crisis is expected to continue, additional decisions have had to be taken to rationalise energy consumption.
“These have included bringing forward the closing times of shops, activating remote work for one day a week throughout the month of April, and the complete suspension of national projects that consume large amounts of diesel for three months, in addition to reducing street lighting and cutting electricity consumption in all government buildings and facilities during official working hours,” Madbouli said.
“Initial indications show that power savings during the first week amounted to 18,000 Megawatt hours, savings amounted to 3.5 million cubic metres of fuel, and savings due to the day of remote working amounted to 4,700 Megawatt hours of electricity and 980,000 cubic metres of fuel savings.”
Madbouli defended the austerity measures, stating that the government is aware that its decision to close shops early would have led to hardships for many people but that he was confident that people would understand the need for it.
“Let me express my deepest respect and appreciation for every Egyptian citizen, hoping that the decision will be reversed soon,” Madbouli said.
ENERGY: Madbouli said that one of his government’s priorities is to maximise the use of new and renewable energy, the best way to enhance the resilience of the national economy by reducing dependence on traditional fuels and creating a balanced energy mix.
He said the government has achieved an unprecedented leap in electricity generating capacity from renewable energy, which has increased from 5,934 Megawatts in 2020 to 9,366 Megawatts in 2025 and to an expected 12,786 Megawatts by the end of 2026.
“We aim for 45 per cent of our total energy production to come from renewable energy sources in 2028, a development which will lead to saving up to $7 billion annually from importing the natural gas needed for operating traditional power plants,” Madbouli said.
He said the government is working hard to attract further foreign investments in the oil and gas exploration field, adding that it will be able to settle all outstanding payments to foreign partners by June 2026, already down from $6.1 billion in June 2024.
As part of strategic investments in the energy security, Madbouli described the Dabaa Nuclear Power Station project, implemented by the Russian company Rosatom, as a structural step to conserve foreign currency in the long term.
“It will save approximately $2.5 to $3 billion annually,” Madbouli said, adding that “if this progress continues at the same pace, coupled with improved and more stable geopolitical conditions, it will create a supportive environment for an economic boom.”
Regarding food security, Madbouli said the government is aiming to narrow the import gap and secure the country’s strategic needs. It expects to receive about five million tons of local wheat from farmers during the current harvest season after the local supply price was increased by LE300 per ardeb to stand at LE2,500.
Madbouli said the improved performance of the Egyptian economy over the past two years has also allowed the government greater flexibility to help contain the fallout of the Iran war.
Due to the substantial economic reforms that the government has implemented since 2024, foreign-exchange reserves had risen to an all-time high of $52.8 billion by the end of March.
Madbouli said that during the first half of the fiscal year 2025-2026, or the period from July to December 2025 and before the outbreak of the Iran war, the growth rate of the Egyptian economy had reached 5.3 per cent, driven by the strong growth of the industrial, agricultural, information technology, and tourism sectors and a rise in private investment rates.
“Foreign direct investment during the first half of the current fiscal year recorded a net inflow of $9.3 billion, for example, up from about $6 billion during the same period in the previous fiscal year,” Madbouli said.
He said the country’s current account deficit had narrowed by 13.6 per cent to approximately $9.5 billion, down from $10.9 billion. “More strikingly, remittances from Egyptians working abroad saw strong growth of 29.6 per cent, reaching $22.1 billion during the period from July to December 2025, up from $17.1 billion during the same period of the previous fiscal year,” he said.
Regarding tourism revenues, Madbouli said they had increased by 17.3 per cent to reach $10.2 billion, up from $8.7 billion, reflecting the recovery of the tourism sector.
He said that the Finance Ministry’s adoption of a strategy to reduce external debt had led to cutting it annually by approximately $1 to $2 billion. “This strategy has already resulted in a reduction of approximately $3.9 billion in debt from June 2023 to April this year,” Madbouli said.
He indicated that improved financial surpluses, and proceeds from public asset sales, including the Ras Al-Roum deal, had also helped to reduce the external debt.
Regarding the initial public offerings (IPO) programme for state-owned companies, Madbouli said 19 complete or partial privatisations of public companies and assets were completed by June 2025, generating approximately $6 billion and representing around 48 per cent of the target of $12.2 billion.
Madbouli said that Egypt’s economic reform measures since 2024 had garnered international praise, with International Monetary Fund (IMF) officials noting that “Egypt has become a model of responsible action during crises” and “Egypt’s financial reforms and the strengthening of its financial buffers have enabled it to better cope with external shocks.”
Madbouli also pointed to international rating agencies, which have confirmed that the Egyptian economy has proved resilient in the face of external shocks.
Standard & Poor’s Global Ratings has affirmed Egypt’s sovereign credit rating at B/B for both the long and short term with a stable outlook. The agency attributes the stable outlook to the balance between Egypt’s medium-term growth prospects and the strong momentum of reforms in the face of renewed risks stemming from the protracted conflict in the region.
Madbouli said that Fitch Ratings had also confirmed that Egypt ranks third among 18 markets in the Middle East and North Africa (MENA) region, and 27th globally among 202 markets, in terms of investment openness, with expectations that maintaining a more flexible exchange rate will attract significant foreign direct investment in the short to medium term.
Madbouli’s statement before parliament on 21 April was the first he has made this year, and it came in response to requests that he come to the House to review the government’s measures in containing the economic fallout from the Iran war.
Parliamentary Speaker Hisham Badawi said Madbouli’s statement would be referred to the House’s specialised committees to study and prepare a report.
* A version of this article appears in print in the 23 April, 2026 edition of Al-Ahram Weekly.
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