Egypt raises prices of most subsidised goods, bread unchanged

Egypt’s supply ministry raised the prices of most of the subsidised goods sold to more than half the population from Monday, a document seen by Reuters showed.

The hikes included a bottle of vegetable oil increasing to EGP 30 ($0.97)from EGP 25, while 1 kilogram sacks of sugar and rice rose to EGP 12.60 from EGP 10.50.

More than 60 million people benefit from a system where each household with a ration card receives EGP 50 ($1.62) per month per person to buy around 32 goods at subsidised prices, including items such as pasta, flour and fava beans.

The government also provides heavily subsidised bread to more than 70 million of its 104 million citizens. Plans to raise the price of subsidised bread, which has been unchanged for decades, were postponed after fallout from the war in Ukraine.

Egypt, a major importer of basic commodities such as wheat and vegetable oil, has suffered a foreign currency crunch that pushed its pound down by nearly 50% against the dollar, suppressed imports and pushed official headline inflation to 32.7% in March, just shy of an all-time record.

READ: Inflation rises to 32.7% in Egypt

The country’s finance ministry said last week it will raise funding for its social protection programs by 48.8% to EGP 529.7 billion in the upcoming fiscal year, with funding for food subsidies rising 41.9% to EGP 127.7 billion.

Supply Minister Ali Moselhy said most of the funding increase would go to bread subsidies.

Moselhy also said last week that Egypt is strongly considering approving the use of the currencies of its commodity trade partners, including China, India and Russia, to try to lessen the need for dollars.