CAIRO – Egypt's government has more than doubled the amount of subsided food that millions of ration card holders can purchase on a monthly basis and raised pensions — measures meant to cushion against soaring prices resulting from harsh reforms that aim to revive the country's battered economy.
President Abdel-Fattah el-Sissi announced the measures in a televised address late Tuesday.
Those holding ration cards would now be able to buy subsidized food items worth 50 Egyptian pounds ($2.8) per person every month — up from 21 Egyptian pounds ($1.16), el-Sissi said.
He said retirement benefits would also be increased by up to 15 percent.
"The cost of reforms has been harsh," the general-turned-president acknowledged and then struck a positive note, adding, that "there will come a day when we will all be in a much better situation."
He said the increase in pensions and food subsidies would cost the treasury a total of 70 billion pounds (nearly $4 billion).
El-Sissi is behind an ambitious reform program that began soon after he took office three years ago. The program significantly accelerated late last year, when he floated the pound, causing it to lose half its value, and lifted fuel subsidies to meet conditions by the International Monetary Fund for a $12 billion loan over three years. The reforms also included hiking the price of utilities and other government services.
The measures sent inflation soaring to about 30 percent, hitting the middle and lower classes the hardest and feeding popular discontent.
Economist Samer Atallah, who lectures at the American University in Cairo, cautioned that el-Sissi's latest measures might fuel inflation and not be enough to offset the soaring prices.
"It would be like giving money with one hand and taking it back with the other," he said.