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The road map places Egypt, the largest economy in the series, in Category 2, and attributes that placement mainly to one budget line. The external and support pillars read as Category 1. Net international reserves reached a record USD 56 bn in July 2026, the IMF programme's seventh review was completed on schedule, and there are about USD 18 bn of GCC deposits and a EUR 7.4 bn EU package. The exchange rate has floated since March 2024, and Suez receipts rose as traffic diverted from Hormuz.
The binding constraint is the cost of debt rather than its stock. Debt is about 89% of GDP, but interest absorbs about 60% of revenue and 10–12% of GDP, and gross financing needs exceed 40% of GDP. A 3.5% primary surplus sits alongside a 7% overall deficit, so the whole deficit is interest. Because interest exceeds 25% of revenue, the framework caps Egypt at Category 2 whatever its other strengths. The paper also flags repeated reliance on hot money, inflation of 12–14% in a population of 107 million, and a labour market with low unemployment but female participation of around 16% and informality above 60%.
The paper concludes that Egypt does not need a rescue; it needs to lower the price of its own debt. The road map is a revenue-and-duration programme aimed at Category 1.
Key findings
- Revenue is to rise from 15–16% to 20% of GDP through removal of exemptions, VAT unification, e-invoicing and full taxation of economic authorities and military-affiliated enterprises.
- The decisive target is cutting interest from about 60% to below 25% of revenue, with debt below 75% of GDP and gross financing needs below 25%.
- The average maturity of domestic debt is to lengthen from under three years toward five, and banks would face phased limits on their exposure to the sovereign.
- Divestment proceeds are ring-fenced for debt reduction, with USD 10–15 bn of debt retired in years 2–3, and domestic gas development is to end LNG imports of USD 3–4 bn a year.
- Portfolio inflows above a threshold are to be sterilised into reserves, and a standing GCC/IMF backstop is to replace the ad hoc support of 2022 and 2024.
- Year 1 legislates a fiscal council and debt ceiling and agrees a successor IMF arrangement before the programme ends in December 2026.
Summary of the paper; the full analysis is in the PDF.