It is not just Egypt’s politicians and experts who are keeping a close eye on loan talks with the International Monetary Fund: ordinary Egyptians suffering the squeeze of a devastating economic crisis are also watching with concern.
Sami Mohammed, a 49-year-old civil servant, has been struggling with soaring inflation and says he fears the IMF’s $4.8 billion loan -- which requires Egypt to contain its gaping budget deficit -- will only cripple his finances further.
He says he has been closely following the progress of the long-mooted deal in the newspapers, including the arrival in Cairo this past week of an IMF team.
“Recent price rises are because of the IMF talks,” said the father of two, who struggles on a meager government salary.
“Once the deal is reached prices will go even higher. I can barely feed my sons as it is -- all the prices have doubled.”
For the past five months, while Cairo has negotiated the financing package with the IMF, prices of basic commodities including electricity, water, gas and food have risen.
To qualify for the loan, Egypt is required to reduce the budget deficit by raising revenues through taxes and reducing subsidies on vital items such as fuel and bread, moves likely to spark social tensions.
Earlier this week, the price of subsidized cooking gas went up by 60 percent to eight Egyptian pounds ($1.15) from five Egyptian pounds ($0.73), triggering market chaos.
It was one of several steps taken by the cash-strapped government to rein in its subsidy bill, and has had a direct effect on the price of food in restaurants and carts that sell fava beans on which many Egyptians rely for protein.
Presidency spokesman Omar Amer said the government was trying to work on a “new formula” for economic reforms.
“We want to make sure that all the subsidies of the government will go directly to the citizens who deserve it, not to everyone,” Amer told reporters.
The government has introduced a smart card system that will limit access to subsidized goods to low-income families.
In Cairo, the frustration is palpable.
“For the last three months, I haven’t bought any item twice for the same price,” said engineer Mohammed Mohammed, 59.
“Our income is the same but the prices keep going up. I expect prices to rise more once we get the IMF loan.”
Flour and sugar are 50 percent more expensive than last year, and the price of vegetables like cucumbers and potatoes has more than doubled.
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