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Egypt defends austerity measures | GulfNews.com

Cairo: Egypt’s President Abdul Fattah Al Sissi on Tuesday defended austerity measures aimed at reviving the economy.

The government recently raised the price of electricity and tap water as part of an economic reform programme linked to a three-year, $12 billion bailout loan from the International Monetary Fund, which Egypt secured in 2016. A new round of fuel subsidy cuts is expected soon.

“All challenges and difficulties could be easy if we endure them,” he said. “We have to pay the price together.”

He was speaking at an outdoor iftar. His comments came hours after the government announced it would slash electricity subsidies, raising charges by an average of 26 per cent.

Al Sissi said late Tuesday in televised comments that the government spends some $18.6 billion a year on subsidies to cover fuel, food and electricity. Each family receives an average of about $60, he said.

Al Sissi said he refused to postpone “necessary reforms” to improve the economy. He urged Egyptians to be patient as the reforms take effect.

Electricity Minister Mohammad Shaker said Tuesday that electricity charges for factories would rise by 41.8 per cent and for households by 20.9 per cent. The new charges will take effect in July, he said.

Egypt’s economy is still recovering from the unrest following the 2011 uprising that toppled longtime ruler Hosni Mubarak.

The austerity measures have included slashing fuel and electricity subsidies, imposing a value-added tax and floating the currency. The measures have won praise from economists and business leaders.

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