The Egyptian government is about to complete the preparation of a new stimulus package providing social protection for citizens, especially the groups most affected by the price increases and the rise in local inflation.
Government sources said that Ministry of Finance has prepared scenarios in this regard but did not mention the size of its cost.
It confirmed that it will not impose more burdens on the state’s general budget in financing.
The sources added that intervention is a duty on the state to face the repercussions of the effects of the price increase through measures that are currently being carefully studied, and the government is about to issue them.
Exceptional measures were recently taken to confront the repercussions of the Russian-Ukrainian war on the Egyptian economy at an early stage, and the public treasury bore its burdens including those related to wages and bonuses.
They continued: “Studies are continuing on the developments of the situation at all levels and changes on a weekly and monthly basis, and there is a recently formed ministerial committee to follow up the economic situation. This committee is constantly assessing the position on a permanent basis.”
Support for initiatives
According to the sources the cash support initiative – Takaful and Karama– will be expanded, as well as support for ration cards.
The sources stressed that there will be no increases in existing taxes, and non-traditional revenues will be sought.
The fourth chapter of the state budget on support, grants and social benefits will be increased with additional allocations to finance the new package and rationalize expenditures, in addition to directing the financial savings achieved from subsidizing petroleum products in the budget to social protection programs.
The head of the Parliament’s Plan and Budget Committee, Fakhry al-Fiqi, revealed that the program for obtaining a new loan from the International Monetary Fund has been reformulated, in light of the development of the Egyptian economy’s indicators, against the background of the repercussions of the current global economic crisis and the Russian invasion of Ukraine.
According to Fiqi, it was scheduled to obtain the loan in the past for the purpose of completing the structural reform program in Egypt, which was launched by the government in June of last year.
Fiqi said that it may be appropriate to take into account the new economic developments and the repercussions of the crisis locally, especially as the indicators of the Egyptian economy were stable when the program was put in place in the past at all levels.
Indicators began to be affected with the beginning of the second half of the past fiscal year.
Fiqi anticipated that the funding available to Egypt will be limited this time, amid estimates that it will range between five to seven billion US dollars.
He said that negotiations are currently taking place between the two sides on many issues in preparation for taking prior measures on the part of the government before signing.
The sources, who requested anonymity, expected that an agreement with the Fund would be reached in August, amid assurances that the social dimension would be taken into account in the repercussions of the upcoming measures.