São Paulo – Faced with a global crisis that has been causing a spike in food prices, the government of Egypt announced this week a series of measures for the social protection of its population. In a press conference at Egypt’s Council of Ministers’ headquarters, Egyptian Prime Minister Mostafa Madbouly (pictured above) said the government had adjusted its budget prioritizing social programs.
The Ministry of Finance amended the budget to tackle surging food and commodity prices, support social protection programs, and increase wages and pensions. The government announced an increase in salaries and pensions at the cost of EGP 16 billion (USD 920 million at the current rate) and an adjustment in income tax exemption to higher salary ranges.
Four hundred fifty thousand new families were also added to the Solidarity and Dignity Program, at an additional annual cost of EGP 2.4 billion (about USD 138 million). The government has also made available a budget reserve for next year, worth EGP 130 billion (about USD 7.4 billion), to face the repercussions and costs if the current international crisis continues. The amount will be used to lessen the burden on citizens.
Incentives for the industry
The Egyptian government has also taken measures to stimulate the industry and boost production. The dollar price will be fixed at 16 Egyptian pounds for essential products and production supplies until the end of April. A reassessment of the situation will be carried out when the month ends.
The prime minister announced the Ministry of Finance would bear the property tax for three years in industrial sectors. This will cost EGP 4 billion (about USD 230 million). According to Madbouly, the stimulus will be presented for the Egyptian Stock Exchange at the next meeting of the Council of Ministers.
Mostafa Madbouly
The press conference by the Prime Minister of Egypt was attended by Tarek Amer, President of the Central Bank of Egypt; Mohamed Maait, Minister of Finance; Nevin Al-Qabbaj, Minister of Social Solidarity; and Major General Jamal Awad, President of the National Social Security Authority.
The Prime Minister emphasized the Egyptian government and all the bodies in the country will continue to follow the path of transparency and sincerity towards the Egyptian people regarding measures to deal with major global crises like the one presently faced. He recalled the crisis affects all economies globally, and countries have been taking measures to deal with the situation within their monetary and financial policies.
Maintaining growth benefits
Madbouly said Egypt successfully faced the COVID-19 pandemic, absorbing and enduring significant challenges with high competence. He recalled Egypt was one of the few countries to achieve a positive economic growth rate, despite the hardships imposed by the pandemic.
He said after the coronavirus crisis, a big wave of inflation and turmoil in supply chains began, and shipping costs rose sharply, followed by the crisis between Russia and Ukraine. He stated inflationary pressure occurs worldwide, in numbers not seen for many years.
Madbouly stressed it is unknown when the current global crisis will end, which requires taking all scenarios into account, including the pessimistic ones, which resulted in the reformulation of Egypt’s monetary and financial policies. He said the Coordinating Council for Monetary and Financial Policies had taken the necessary measures for Egypt to preserve the economic gains achieved, considering social protection.
Translated by Ahmed El Nagari & Elúsio Brasileiro
