Egypt's water needs will surpass its resources by 2017 because its population, now around 76 million, is still increasing fast, the state-run news agency MENA said.
The agency cited a recent report by the cabinet's Information and Decision Support Center as saying the Arab world's most populous country would need 86.2 billion cubic metres of water in 2017 while resources would be only 71.4 billion cubic metres.
Egypt's water resources stood at 64 billion cubic metres in 2006, of which the River Nile provided 55.5 billion cubic metres, or 86.7 per cent, the report said. By 2017 the Nile is expected to supply only 80.5 per cent of Egypt's resources.
Egypt is heavily dependent on river water as it has little rainfall.
A 1929 agreement between Egypt and Britain, acting on behalf of its then east African colonies, gave Cairo the right to veto projects higher up the Nile that would affect its water share.
A 1959 accord between Egypt and Sudan, supplementing the previous agreement, gave Egypt the right to 55.5 billion cubic metres of Nile water a year.
The agreements have created resentment among other Nile states and calls for changes to the pact, resisted by Egypt.
Ministers from all 10 Nile basin countries are expected to meet in Egypt later in July to discuss water allocation issues.
Egypt's Water Resources Ministry has said it aims to fight water poverty by tackling wasteful farming practices and looking for alternative sources such as desalination of sea water.
Egypt's water supply is equivalent to an allocation of 860 cubic metres per capita per year, well below the water poverty line of 1,000 cubic metres per capita a year.
The cabinet report predicted the allocation would fall to 582 cubic metres per capita per year by 2017 if action was not taken to reverse the downward trend.
The Agriculture Ministry has also been trying to limit the growing of crops that consume a lot of water, such as rice, in order to alleviate the shortage.
Agriculture accounted for 83.3 per cent of water consumption in Egypt in the fiscal year 2007/08.