- Attia Nabil
- BBC – Cairo
Rasha Mahmoud sat for long hours with her husband trying to prepare the household budget for the month of Ramadan, as the family’s consumption of various foodstuffs increased before this month. However, as a result of the recent rises in the prices of many commodities, which ranged between 20 and 50 percent, it finds itself handcuffed.
Rasha tells the BBC that the family’s budget for bread alone has increased by nearly 50 percent after the recent increases in the prices of bread of all kinds, which are the increases that came as a result of the rise in the price of flour and the cost of production. It also indicates increases in the prices of meat, poultry, eggs, cheese products, and edible oils in varying proportions.
Giving up “Yamish Ramadan”
After a previous tour of the markets, Rasha decided to dispense with buying yams and nuts for the month of Ramadan this year, after noticing a “crazy rise in their prices”, which means her financial inability to buy these goods, which she now sees as “luxury”, even in quantities. few. In light of this, she has no choice but to ask her husband to increase the household expenses.
picture released, Getty Images
The suffering of Rasha and her family, who is among the middle class in Egyptian society, is considered lighter compared to the suffering of other poor or destitute classes whose monthly income is less than 1,200 pounds.
According to the Federation of Egyptian Chambers of Commerce, the average price of municipal meat increased from 120 pounds to more than 170 pounds, and the price of a kilo of chicken reached about 45 pounds, after it was 30 pounds, and the price of a medium-quality frying oil bottle reached 31 pounds, while the average price of Cooking oil and margarine to about 40 pounds.
The price of one egg reached more than two and a half pounds, and the price of a kilo of sugar – free and unsupported – increased to 15 pounds, while the price of rice increased by 5 Egyptian pounds, bringing the price of one kilo to 15 Egyptian pounds, which are unprecedented prices, which may return in general To a crisis in supply and production chains, rising retail prices, the cost of shipping, warehousing and others.
Urgent government measures
All these developments prompted the Egyptian government to take a set of urgent measures to reduce price fluctuations in the markets and the rise in transportation and shipping costs due to the increase in global oil prices as a result of the continuation of the Russian war on Ukraine, as well as the continuing effects of recession and inflation caused by the Corona epidemic crisis.
picture released, Archyde.com
The Ministry of Finance announced the payment of wage and pension increases
Among these government measures, comes what the Ministry of Finance recently announced regarding the disbursement of wage and pension increases as part of a package of financial and social protection measures, with a total value of 130 billion pounds. It is a step that the Egyptian government hopes will contribute to dealing with the repercussions of the current economic challenges.
And the Ministry of Finance said – in a statement on Monday – that it was decided to increase the periodic bonus for employees by rates ranging between 8 percent and 15 percent of the basic wage, with a minimum of 100 Egyptian pounds per month and up to 400 pounds in the higher job grades, starting from next April.
wages and pensions
The Egyptian Ministry of Finance also announced an increase in wages and pensions by 13 percent, and announced the allocation of 190.5 billion pounds to the National Authority for Social Insurance to disburse this increase in pensions, with a minimum of 120 pounds, starting next month.
The ministry indicated that it will provide 2.7 billion pounds to include 450,000 new families for beneficiaries of the government support program for the poor classes “Solidarity and Dignity”, while raising the tax exemption limit on income by 25 percent to mitigate the effects of the current economic situation.
Under presidential directives, the Egyptian Ministry of Supply announced, for the first time in a long time, a compulsory price for free tourist bread – which is not subsidized – after its prices witnessed significant increases following the current global crisis due to the Russian-Ukrainian war, as Egypt imports from these two countries about 80 percent of its It imports wheat and grains.
The government pledged to provide unsubsidized free flour at prices close to those before the outbreak of the war, noting that there are sufficient reserves of major and strategic commodities for the next four months. This came in conjunction with taking more protectionist measures to control markets, combat unjustified rises in commodity prices, and expand programs to protect the poor.
Developments “beyond Egypt’s control”
During a phone call on Sunday evening with one of the Egyptian satellite channels, Egyptian President Abdel Fattah Al-Sisi said that the government is working to absorb the largest possible amount of negative effects of global events on the Egyptian economy, noting that these developments are beyond Egypt’s control, and came in light of attempts to recover from Effects of the Corona crisis.
But he stressed that the Egyptian state “was able to provide the necessary commodities to citizens,” stressing that there is no shortage of oil, tea, sugar, or any other necessary commodities, he said.
President Sisi indicated that the “Solidarity and Dignity” program to help the poor classes currently includes 3.7 million families, at a total cost of 19.5 billion pounds, while the state is working to increase the number of beneficiaries during the next stage.
shock absorption
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The Central Bank of Egypt announced an interest rate hike
Commenting on these decisions, Dr. Rashad Abdo, Head of the Egyptian Forum for Economic Studies, told the BBC that the recent decisions of the Central Bank regarding raising the interest rate by one percent on lending and depositing to reach about 10 percent, and the creation of new savings deposits. The interest in it reaches about 18 percent, and it aims to “withdraw cash from the markets”, and then combat inflation and price hikes.
Dr. Rashad also explains that reconsidering the exchange rate of the pound against the dollar, which led to a decrease in its value by about 15 percent, came after noticing the high demand for the dollar, and the tendency of some to speculate in its price, as well as the lack of cash reserves from the “green currency”. at the Central Bank of Egypt.
The Egyptian economic expert believes that all these decisions are “immediate palliatives to deal with the current crisis,” noting that permanent solutions require “changing policies towards expanding the cultivation of agricultural crops” to achieve self-sufficiency, reduce the import bill, and provide more productive job opportunities. .
In turn, economic researcher Mona Badir tells the BBC that the Egyptian government may resort again to asking for help from the World Bank to support its budget and absorb the crisis that occurred due to international conditions, as it will work to tighten monetary policies and attempts to control markets.
It appears that it is pessimistic about the extent of the government’s measures to curb inflation, adding that the current environment in Egypt is an “inflationary environment that qualifies for more inflation and price hikes” due to external pressures, as she described it.