A wave of high prices in Egypt at the beginning of the year caused controversy, and the government defended its economic

Prices and increases in Egypt range from 15% to 35% at the start of the new year, and new increases are expected elsewhere amid efforts to bring prices down. The Egyptian pound gains again against the US dollar.

On New Year's Day, citizens of the most populous Arab country (105 million) blamed each other at work, at home, in the streets and in the markets and wondered: Why are prices rising? When do you stop?

Officials responded to citizen anger, opposition and questioning by saying that these decisions were delayed and necessary and that delaying them would do more harm than good. The Egyptian government has avoided responsibility for these increases, blaming “sterling weakness” and external causes.

The new price tags topped Egyptian social media platforms following a series of decisions to increase transport, communications, electricity, goods and merchandise prices, as well as fees for certain services.

The price of Cairo metro train tickets has increased by 30%, the prices of all Internet and communication packages have increased by 15% to 33%, the most popular electricity prices have increased by 20%, car prices have increased, registration fees and transfer fees have doubled, with increases of up to 20% , more than 200%, while the price increase of building materials, consumer goods, food, etc. is not less than 10%.

Citizens are confused

Mohamed Fati (35), an employee of a financial financing company in Cairo Province, expressed dissatisfaction with the continued rise in prices. He told Al Jazeera, “The rise in prices will never stop and no one can set a reasonable price standard.” “He A schedule of expenses. It used to be enough for a week, but now it’s enough.” Half, then a third, then a quarter, the salary remains the same.

The government confirmed its priorities of increasing wages and pensions and raising tax-free limits to try to stem as much as possible the consequences of the unprecedented wave of inflation caused by the coronavirus pandemic and subsequent geopolitical tensions.

The minimum wage for state employees is £4,000 ($130) for sixth grade and £11,000 ($358) for excellence grades, while the minimum wage for private sector workers is £3,500 ($114) instead of £3,000 ($114). Growth of 16% (USD equivalent to £31 at the bank and £53 on the parallel market).

Safia Gamal, an administrator at one of the health authorities in Giza governorate (south of Cairo), said the price increase was “expected,” adding to Al Jazeera, “Everyone knows Prices will rise, but “when and by how much, no one knows, and we have to adapt to them.” “These increases are not the first, nor will they be the last, where young people have to work and help their families.

Saeed Mahfouz, the owner of a food store in a suburb of Giza, does not believe that “the problem is just rising prices, but the availability of goods on the market, because any shortage will lead to a sharp increase in prices.” He added in an interview with Al Jazeera that no one can stop the price rise and the government said it was working to mitigate the losses and that it had already suffered a lot.

Egypt faces pressure from IMF to raise prices (Al Jazeera)

The International Monetary Fund is behind the scenes

Mahmoud Al-Asqalani, chairman of the Citizens Against High Prices association, attributed these new price increases to demand International Monetary FundThe original plan, announced at the beginning of the year, could have been postponed, but Egyptian negotiators were under intense pressure and lost the strength and ability to resist such measures.

Askalani explained in an interview with Al Jazeera that he originally hoped that the government would send a positive signal to people suffering from high prices at the beginning of the new year, but the reality was just the opposite, and the government's tolerance contract was broken. Indicates that rising prices for basic services will result in higher rates. inflation And as prices for other goods rise, citizens have no choice but to coexist, endure, and endure.

Al-Asqalani believes it is unfair to hold the pound responsible for high prices, ongoing support and rising prices for services. As the dollar falls against the dollar, what is happening is taking advantage of the crisis and speculation on the dollar must stop until the performance of high prices ceases.

government's sin

Ahmed Khuzaym, chairman of the Development and Value Addition Forum and an economic expert, described the government’s decision as a “forced step because in view of the decline in dollar resources from tourism and remittances, the government has no choice but to collect remittances.” There is no source outside of it.” Egyptians abroad, new geopolitical threats, rising global inflation and rising interest rates, all are stronger factors. “You need a solid financial foundation. “

He stressed in an interview with Al Jazeera that such decisions were expected to be made in order for the government to maintain budget levels, given that the draft budget adopted last summer had an initial deficit of more than 824 billion pounds ($27 billion). The deficit does not get worse and reduces pressure on the budget, whose revenues are used to pay debt and interest, and the government will continue to raise prices and impose more fees on services and goods.

Ahmed Kuzaim dismissed such decisions as not solving any crisis, pointing out that it was not an economic, financial or monetary reform and that financial policy was open to lending and monetary policy was reticent in raising interest rates. Countries whose monetary policies are at odds with their financial policies, as well as continuing to print money, failing to generate dollars, and failing to benefit from the structural sectors of industry, trade and agriculture, are all part of the government's fault. This has been going on since 2016.

Egyptian Prime Minister Mostafa Madbouly speaks during a joint press conference with Tunisian Prime Minister Najla Bouden on Friday, May 13, 2022, in Tunisia.  (AP Photo/Hassene Dridi)
Madbouly: The purpose of raising the prices of some basic commodities is to reduce the financial burden on the country (AP)

The government will not tolerate it forever

Prime Minister Mustafa Madbouly blamed the rise in prices on the rise in the official price of the U.S. dollar, explaining at a press conference last Wednesday that the state had taken on more burdens to ease citizens since the crisis began in February. In 2022, the Russia-Ukraine war broke out.

According to Madbouly, without support in 2021, support for five strategic goods and services would have increased from £100 billion (for example: electricity, fuel, catering, cookstoves and bread) to £342 billion. The coronavirus pandemic, the Russia-Ukraine war and the global inflation crisis.

He stressed that part of the goal of raising prices for some basic goods and services “is to relieve the country's already significantly increased fiscal burden,” and warned that if it continued, “these problems could explode” in the short term. “

Egypt has devalued the pound three times since February 2022, devaluing it by 31 pounds in the bank and about 53 pounds in the parallel market. The inflation rate has reached about 36%, and the external debt remains at a record high of about 164.5 billion US dollars.

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