Egypt

The live 12-month probability of a new armed-conflict onset in Egypt is 18.4%, a high risk. Egypt’s exposure reflects its history of Islamist insurgency and terrorism, especially in North Sinai, episodes of severe domestic political violence, military dominance of politics, economic pressure, and tensions over vital resources and borders.

Recent reporting highlights the unresolved Nile dispute with Ethiopia over the Grand Ethiopian Renaissance Dam, after U.S. talks collapsed. Egypt’s concerns about water supplies and the reported strengthening of Ethiopia’s military ties with China add interstate tension, although no fighting on Egyptian territory is reported. The Iran–US war has also prompted travel warnings covering Egypt, but the report describes no Iranian attack there.

The largest uncertainty is whether the Nile dispute remains diplomatic or develops into coercion, proxy activity, or a direct cross-border incident. A breakdown in Egypt–Ethiopia engagement, armed activity linked to Sinai or other domestic networks, or regional spillover reaching Egypt would raise risk; sustained negotiations and effective internal security would lower it. Polymarket contracts assign 1.8% and 0.9% probabilities to Iran targeting Egypt by September 30 and September 15, respectively, with partial scope.