He also assessed Egypt’s recent economic reforms, their impact on the business climate, and his outlook on the country’s growth prospects and challenges.
The World Bank has long been a strategic partner to Egypt, supporting its development trajectory through years of cooperation.
That framework continues to evolve in response to global and domestic shifts, with a renewed focus on generating tangible social impact, particularly as Egypt presses ahead with economic reforms, redefines the state's role, and works to empower the private sector as a central driver of production and growth.
Ahram Online (AO): How does the World Bank assess Egypt’s recent economic reforms?
Stéphane Guimbert (SG): Egypt has implemented a number of significant economic and fiscal reforms. Achieving economic stabilization during a critical period a few years ago was essential.
These reforms were vital to eliminate the black market for foreign currency, unify the exchange rate, and reduce inflation, all of which were positive steps.
However, the Egyptian economy still operates in a global and regional environment marked by tension and instability. Therefore, further reforms are needed to enhance Egypt’s economic resilience and ability to withstand shocks.
AO: What are the main challenges currently facing the Egyptian economy, and how can they be addressed?
SG: After making substantial progress, Egypt still faces several internal and external challenges, which is normal for any economy.
Key challenges include maintaining macroeconomic stability, improving overall indicators, and investing in human capital by developing skills and unleashing potential. Job creation is among the most pressing priorities, as it improves living standards and reduces poverty. Strengthening social protection networks to support vulnerable groups is also crucial.
Another challenge is climate change, which affects Egypt as it does the rest of the world, requiring the adoption of green and adaptive policies. Regional and geopolitical tensions also weigh on the local economy and its capacity for growth.
AO: What are your growth projections for Egypt, and how can growth be increased?
SG: Growth rates in Egypt fluctuated over the past two years but have recently begun to recover thanks to continued reforms. According to the World Bank’s latest Growth and Jobs Report, Egypt’s GDP is expected to grow by 4.5 percent from 2025–2027.
Egypt has strong potential for higher growth due to its strategic location, human capital, large domestic market, and diverse economy, in addition to its unique cultural and historical assets.
To unlock this potential, Egypt must adopt comprehensive and well-coordinated policies to sustain annual growth rates of 6–7 percent, primarily by empowering the private sector and creating jobs for more than 1.7 million new entrants to the labour market each year.
AO: What policies are needed to sustain high growth rates?
SG: The most critical factor is maintaining macroeconomic stability, which ensures durable growth that positively affects people’s lives. Equally important is unleashing private sector potential.
Currently, private sector participation in GDP is only about 6 percent, roughly a quarter of that in peer economies. Therefore, barriers must be removed to raise the private sector contribution to around 20 percent, enabling it to lead Egypt’s next phase of growth.
AO: You emphasized job creation. What policies can help achieve this?
SG: Job creation depends primarily on private sector empowerment through policies such as:
Clearly defining the state’s role in the economy
Promoting fair competition
Improving the business environment, including land allocation and licensing
The World Bank’s strategy in Egypt focuses on supporting job creation by assisting large, medium, and small enterprises, and by attracting both domestic and foreign investment.
We also emphasize women’s economic participation, which currently stands at only 18 percent, far below the 50 percent seen in comparable economies.
Moreover, many women work in the informal economy, which must be integrated into the formal sector to ensure access to financial services and business development tools.
AO: Inflation has been declining. How do you view this trend?
SG: Egypt has indeed made progress in containing inflation, reflecting improved macroeconomic stability.
The target now is to reach single-digit inflation. It is important to note that lower inflation does not mean prices fall, but that the rate of increase slows.
Many families still struggle with high living costs, which is why social protection programmes such as Takaful and Karama remain vital.
The World Bank continues to support this successful programme, which has positively impacted millions of households since its inception.
AO: Will there be new funding for social protection programmes?
SG: The World Bank has supported Egypt’s social protection efforts for the past ten years, including $500 million in financing for Takaful and Karama.
However, financial assistance alone is not sufficient; these programmes must be institutionalized within the state budget and rely increasingly on domestic resources to ensure long-term sustainability.
AO: Does reducing subsidies conflict with social protection goals?
SG: There is no contradiction. Social protection programmes assist the neediest groups, while subsidy reform ensures that support is targeted to those who truly need it.
Many countries have successfully restructured their subsidy systems, redirecting savings to strengthen social programmes, improving efficiency and fairness in public spending.
AO: How do you view Egypt’s fiscal discipline and debt reduction efforts?
SG: Egypt’s debt levels were high, necessitating reforms to reduce them and boost revenues. Minister of Finance Ahmed Kouchouk has led important initiatives to enhance tax revenues and build trust between tax authorities and the business community.
New measures will soon be announced, including the unification of fees collected from companies by various agencies, a reform led by the Ministry of Investment that should improve efficiency.
Increasing revenues will support fiscal balance, strengthen social spending, and reduce debt over time. Lower interest rates would also ease budgetary pressures, though debt-servicing costs remain high.
AO: Egypt has imposed a borrowing ceiling. Will this affect cooperation with the World Bank?
SG: Yes, the borrowing ceiling could affect future programmes, though ongoing ones continue as planned. We aim to balance our operations with those of the International Finance Corporation (IFC), which focuses on private sector support, to ensure effective results.
AO: What is your view of the exchange rate liberalization and its impact on businesses?
SG: Policy clarity and transparency are crucial for businesses. The private sector welcomed the exchange rate liberalization, as it eliminated the black market, unified the exchange rate, and restored predictability.
This allows investors to make informed decisions and plan more effectively. The Central Bank’s goal of reducing inflation through monetary policy is vital for sustained stability.
AO: How do you view the implementation of Egypt’s State Ownership Policy Document?
SG: The government has taken meaningful steps to implement the State Ownership Policy, redefining the state’s role and accelerating privatization through a new committee.
The IFC, the World Bank’s private sector arm, is providing advisory services on asset sales, including airports and other projects. Transparency is essential, with clear communication about which companies are available for investment so the private sector can evaluate opportunities.
AO: Egypt has launched a National Economic Narrative. What does it add to the economy?
SG: The National Narrative is a positive step. It outlines the reforms and measures to be taken, including restructuring the state’s role in the economy and reinforcing private sector participation.
It also identifies Egypt’s main economic challenges and proposes clear solutions, particularly the shift toward productive and industrial sectors.
A public dialogue is currently underway to refine the document before completing a final version that will serve as an action plan for the coming years. Once finalized, we are ready to support and co-implement many of its programmes and projects.
AO: What are the current cooperation programmes between Egypt and the World Bank?
SG: Egypt and the World Bank currently have a $7 billion financing portfolio aligned with the 2023–2027 Country Partnership Framework. Our priorities include job creation through private sector development, education and healthcare projects, social protection, and green transformation initiatives.
The focus now is on deepening impact in these sectors rather than expanding into new projects.
AO: And what about education reform?
SG: We are working closely with Egypt on education reform, especially in primary education. Previously, around 70 percent of students at this level struggled with reading comprehension, a figure now reduced to 50 percent, though still high by global standards.
Ongoing efforts to modernize curricula and introduce digital tools have shown progress. While the path to education reform is long, technological advances and AI can accelerate improvement.
AO: Finally, what are your recommendations for the Egyptian economy?
SG: My recommendations are straightforward: focus on job creation and private sector empowerment. They are the foundation for stimulating the economy, improving living standards, and moving confidently toward a brighter future.
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