For the past two weeks streets have been crowded with shoppers stocking up in preparation for the holy month of Ramadan.
Some of the hypermarkets are offering discounts on some staples, but products such as meat and chicken are not always on sale.
“Prices have not doubled like they did two years ago, but they have increased nonetheless,” said Maissa Othman, a Cairo housewife.
Urban headline inflation recorded 11.9 per cent in January compared to 12.3 per cent in December 2025. This is a considerable improvement compared to September 2023, when annual urban inflation reached a peak of 38 per cent.
But Othman said that despite the strengthening of the pound against the dollar, prices have not come down. “When the pound first depreciated, all the price increases were attributed to the stronger dollar,” she lamented.
The pound is currently trading at around LE47 per dollar, compared to around LE50 per dollar in December 2024.
Sama Sadek, an ophthalmologist, said that to many people Ramadan is a festive season and families spend a third to a half of their monthly budget to buy Ramadan essentials that today include not only food, but also decorations and dried fruit and nuts.
On Tuesday President Abdel-Fattah Al-Sisi met with the cabinet to ensure that essential goods are available throughout Ramadan. The president stressed that there must be strict daily monitoring of markets to prevent price manipulation.
Aware of families’ extra needs in Ramadan, the government has also stepped in with a social-support package. At a cost of around LE40 billion, it is rolling out a two-phase support package, beginning with immediate Ramadan and Eid measures and followed by broader reforms in the new fiscal year starting on 1 July.
This funding is entirely from real resources, without affecting budget allocations or targets approved by parliament, Minister of Finance Ahmed Kouchouk said on Saturday at the press conference during which the package was announced.
“These resources are now available due to improved economic conditions, allowing support for citizens across diverse services,” he added. The comprehensive plan, Kouchouk said, is designed to directly benefit millions of Egyptians, ensuring better services and financial support.
The package involves disbursing an additional LE400 per month in Ramadan and Eid support to 10 million ration-card holders. An equal amount will go to around five million Takaful and Karama (Solidarity and Dignity) cash-benefit beneficiaries.
The package also dedicates LE3 billion to state-funded medical treatments, especially for critical cases and for clearing waiting lists.
Kouchouk said that President Al-Sisi has directed that no limit should be set on the amount of funding. If more funds are needed, they will be provided, he said.
As part of the package, the Haya Karima (Decent Life) initiative will receive LE15 billion to complete its first phase. Some 1,000 projects related to sanitation, clean water, and essential services are almost complete in several governorates, Kouchouk explained. The new funding ensures rapid completion and delivery, he added.
In the new fiscal year, the government plans to increase the minimum wage, give better pay to teachers and doctors, and raise the income tax exemption threshold.
The LE40 billion social-support package is timely and well-targeted, said Khaled Sakr, former International Monetary Fund (IMF) assistant director. In addition, its size seems to be within the fiscal space created by recent reforms and is thus consistent with macroeconomic stability, he added.
This prudent approach to enhancing social protection further builds on the credibility of the Ministry of Finance, Sakr said. It is key to the government’s collaborative relations with development partners, including the IMF, which must have supported the package since it coincides with the approaching review of Egypt’s IMF loan programme later this month, he noted.
The IMF is scheduled to discuss the fifth and sixth reviews of Egypt’s Extended Fund Facility (EFF) and the first review of its Resilience and Sustainability Facility (RSF) arrangements on 25 February. Once the IMF board approves the reviews, Egypt should receive $2.3 billion in funding from the multilateral financial institution.
The support measures are welcome and timely for lower-income households, said policy advisor and associate professor of economics Ahmed Rashad.
The government is right to emphasise that cash transfers are among the most effective social-protection tools, he said. He noted, however, that their impact is conditional on inflation being contained, ideally below seven per cent.
The poverty problem in Egypt is driven not only by low productivity, but also by repeated inflation shocks linked to periodic currency devaluations, he stressed.
To put the LE400 payment in perspective, he said that Egypt’s poverty line was around LE900 per person per month in 2019-2020. Adjusting this using the Organisation for Economic Cooperation and Development (OECD) household equivalence scale and inflating it to reflect the sharp rise in prices since 2020 suggests an updated poverty threshold of roughly LE5,700 per month for a household of two adults and three children.
This implies that the LE400 payment represents about seven per cent of the household poverty line, which is not transformative, but is meaningful for consumption smoothing during a high-spending month, Rashad said.
The support package announced on Saturday comes after last week’s cabinet reshuffle, which ushered in new faces in the economic portfolio among others. The new cabinet has been tasked with improving the economy and reducing public debt as well as proceeding with the State Ownership Policy through concrete measures while expanding private-sector participation in the economy.
What is particularly promising regarding the new economic ministerial group is that its members see eye-to-eye, Sakr said, adding that this bodes well for coordination between them.
It is, therefore, important, he said, that they resist untested “innovations” and “solutions outside the box” unless they are based on the successful experiences of other countries.
If faster results are aspired to, the better course is to accelerate the implementation of proven theories “within the box” rather than venture into unchartered experiments that could be very costly, Sakr stressed.
According to Sakr, the economy is on the right track. Debt has sharply declined from almost 100 per cent of GDP to about 85 per cent in two years and is on a steady path to about 70 per cent by 2030, according to the IMF, which is favourable by international standards.
Together, with fiscal reforms, the government’s prudent monetary policy has succeeded in decisively decelerating inflation, resulting in the abundant availability of foreign exchange to finance imports and stabilise the free fall of the pound.
Nonetheless, Sakr said there is still a long way to go in implementing reforms to mobilise additional revenue to create greater fiscal space for social protection, considering the still high poverty rate.
According to the World Bank, the poverty rate in Egypt stands at 33.5 per cent.
Further steps are also crucial to simplify administrative procedures and streamline the civil service while ensuring that public-sector wages are gradually improving, Sakr said.
This, together with significantly reducing the public sector’s crowding out of private investment, is the most effective way to improve the business environment and strengthen manufacturing and export performance.
It will in turn increase job creation and the resilience of the country’s balance of payments, he concluded.
* A version of this article appears in print in the 19 February, 2026 edition of Al-Ahram Weekly
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