World Bank welcomes Egypt reforms, says will create jobs, promote social inclusion

Ahram Online , Saturday 5 Nov 2016

The Central Bank of Egypt floated the pound and raised interest rates, while the petroleum ministry increased the prices of petrol and gas by between 30 and 50 percent

subsidised food
File photo: A worker sells subsidized food commodities at a government-run supermarket in Cairo, Egypt, February 14, 2016 (Reuters)

The World Bank welcomed Friday Egyptian economic reforms, saying they would create jobs and promote social inclusion, one day after the country floated its currency, raised the prices of energy products, and increased food subsidies.

On Thursday, the Central Bank of Egypt floated the Egyptian pound and raised interest rates, while the petroleum ministry increased the prices of petrol and gas by between 30 and 50 percent.

The Egyptian government’s economic reform package would “boost the competitiveness of Egyptian businesses, support export growth, attract new foreign investment, free public resources for priority growth and social programmes, and support incomes for the poor and the vulnerable,” a World Bank statement read.

The World Bank’s country director in Egypt, Asad Alam, said in the statement that the international financial institution is pleased with the government’s expansion of the Takaful programme, which already reaches around 4.5 million people in extreme poverty.

Karama and Takaful are two social support programmes that aim to increase the consumption capacities of individuals and families living in poverty.

Minister of Social Solidarity Ghada Wali said at a cabinet press conference Friday that the Takaful programme will encompass more people, but did not specify figures.

Also, in the press conference, the minister of supply announced that the country would increase the amount allocated to individuals holding food subsidy cards from EGP18 to EGP21 starting next month.

Minister of Finance Amr El-Garhy said the increase in individual shares in the smart-card system for subsidised food will increase the state budget in this category from EGP44 billion to EGP50 billion.

The reforms are part of moves to gain International Monetary Fund board approval for a $12 billion loan package to be delivered over three years. 

They also aim to decrease Egypt's budget deficit, which currently stands at 12.2 percent of GDP, to less than 10 percent this financial year.

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