Egyptian consumers face tough year despite gains

Significance

The Egyptian authorities increased energy prices and hiked interest rates in an effort to keep the IMF-backed economic reforms on track, but the impact of these measures has been mitigated by increased allocations for food subsidies and social benefits, and by a modest increase in public sector salaries.

Impacts

• Due to the effects of devaluation, the price increases will leave energy subsidy costs to the government largely unchanged.
• The squeeze on living standards risks provoking popular protests.
• Organising demonstrations will be difficult under the heavy security regime of President Abdel Fattah el-Sisi.