President Abdel Fattah al-Sisi said on Wednesday that tough economic conditions in Egypt would improve in six months and called on businessmen and investors to help the government curb price increases. Speaking at the opening of a fish farm project in the Suez Canal city of Ismailia, Sisi praised Egyptians for the way they had dealt with harsh economic reforms.
"The efforts to alleviate those effects are massive," he said. Egypt took markets by surprise on November 3 when it abandoned its pound currency's peg to the dollar in a move aimed at attracting capital inflows and weakening a currency black market that had all-but displaced the banks. Hours later, the government hiked fuel prices. The flotation helped the cash-strapped government clinch a $12 billion IMF loan programme it hopes will revive growth hampered by political uncertainty since the 2011 uprising that ended Hosni Mubarak's 30-year rule.
Sisi came to power promising economic reform and stability but problems have piled up. With a budget deficit of 12 percent and a looming funding gap, he was forced to undertake harsh economic measures. Egyptians, many of whom are forced to scrape by from day to day, feel hard-hit by tax rises, soaring food price inflation, and cuts in state subsidies. Prices in the most populous Arab country are likely to keep rising next year, economists say, driven by the reforms. The main measure of inflation is at eight-year highs above 19 percent, as a foreign exchange shortage and a rise in customs duties bite hard in a country that imports everything from sugar to luxury cars.
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