The monster of high prices devours Egyptians

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As a monster devours Egyptians’ dreams, high prices grind the citizens’ salaries and income. They are tired of evaporating in the face of the price increase, which is increasing in ferocity day after day and year after year. For years, the prices of goods and services kept rising ceaselessly and grinding citizens ruthlessly since the government’s decision to liberalise the pound’s exchange rate in 2016, or what is known as “floatation.” This decision came in response to the International Monetary Fund’s conditions for obtaining a loan of $12 billion.

The Egyptian citizen was shocked this month when the price of the metro ticket was raised, the weight of a loaf of bread was reduced, and there was an increase in tax on the use of mobile phones. Finally, cleaning fees were linked to electricity consumption, which was approved by parliament, and amounted to EGP 40 ($2.52) for residential units. Social media users lamented the imposition of fees and taxes and the raise in the prices of several products and services, which further destroyed citizens’ economic situation.

High prices

The Egyptian government reduced the weight of the subsidised loaf of bread from 110 grams to 90 grams, which is more than 18 per cent. This decision comes in light of the government’s plan to gradually liberalise subsidies from the food supply and subsidised bread systems.

It was preceded by a few hours by the Metro Company’s announcement of an increase in ticket prices for all three lines. The price of a ticket went up from EGP 3 ($0.19) to EGP 5 ($0.32) for one ticket and EGP 5 to EGP 7 ($0.44) on another. For more than 16 stations, the value increased from EGP 7 pounds to EGP 10 ($0.62), and it may rise to EGP 12 ($0.76). It is noteworthy that the price of the metro ticket in Egypt was EGP 1 ($0.06) for all stations three years ago.

The rising prices of products and services have continued brutally for several years, and no one knows when it will stop and when the subsidy removal procedures will end. What will life look like for citizens after that?

Poverty and unemployment

The high price in Egypt caused direct economic and social harm to the citizen, as the poverty rate increased to 32.5 per cent of the population by the end of the 2017/2018 fiscal year, compared to 27.8 per cent for 2016/2015, the highest rate over the past 20 years.

According to the Central Agency for Public Mobilisation and Statistics statement issued last year, the percentage of the poor jumped from 16.7 per cent in 1999/2000 to 21.6 per cent in 2008/2009, then 25.2 per cent in 2010/2011, then 26.3 per cent in 2012/2013, then to 27.8 per cent in 2015. Then the percentage increased to 32.5 per cent in the 2017/2018 period due to the economic reform measures undertaken by the state. The World Bank issued a statement last May, saying: “About 60 per cent of the Egyptian population is either poor or vulnerable to poverty.”

The Central Agency for Public Mobilisation and Statistics also announced a few days ago that the unemployment rate in Egypt increased during the second quarter of this year to 9.6 per cent of the total workforce, compared to 7.7 per cent in the first quarter of the year.

Dangerous effects

The impact of high prices is manifested in many ways – official statistics have revealed that there are more than ten million young men and women over the age of 35 who have not yet married. Economists expect the rate of decline in marriage contracts, due to the increase in prices since the liberalisation of the Egyptian pound exchange rate against foreign currencies. In light of government statements about raising subsidies, Egyptians are devoid of any means to defend themselves.