Egypt's tourism and finance ministries have agreed to inject LE1 billion worth of funds to support the tourism sector, in reparation for recent cuts in fuel subsidies.
According to Tourism Minister Hisham Zaazou the sector will suffer losses as fuel costs make up 80 percent of travel tours expenses, while the decision to reduce energy subsidies came in the middle of the high season and after domestic agencies had signed deals with foreign agencies.
Zaazou did not give further information about how the funds would be distributed.
The government of Egypt raised the prices of three widely-used state-subsidised fuels -- 80 octane gasoline, 92 octane, and diesel fuel – by up to 78 percent earlier this month.
The move is part of a larger effort to rein in Egypt’s budget deficit to 10 percent of GDP in the 2014/2015 fiscal year by cutting LE44 billion in spending on energy subsidies, among other measures.
Expectations for a higher value dollar as well as an anticipated rise in demand among Egyptian tourism in the winter season could contribute to reducing the sector’s losses, said Zaazou.
Citing the fact that 80 percent of world tourism and travel occurs is organised via the internet, the minister announced that the government would collaborate with tourism agencies to develop electronic infrastructure for the whole sector.
The tourism sector, which accounts for roughly nine percent of GDP, has received several blows since a popular uprising forced president Hosni Mubarak to step down in 2011.
During the first half of 2014, around 4.4 million tourists visited Egypt, a 25 percent drop from the same period the previous year, reported state-run statistics agency CAPMAS.