Egypt's PM Sherif Ismael (Reuters)
Egypt’s Prime Minister Sherif Ismail presented the president on Wednesday with the latest updates on the ongoing economic reform measures, stating that the cabinet is targeting a 22.6 percent inflation rate by the end of the year, down from 32.5 percent registered in March.
Inflation in the country has been accelerating since November, when the Central Bank of Egypt (CBE) floated the exchange rate, which caused the value of the pound to plummet from EGP 8.8 to an average EGP 18 per dollar.
Earlier this month, El-Sisi met with the managing director of the International Monetary Fund Christine Lagarde, who offered technical assistance to "the government and the central bank to bring inflation under control and support the steps the Egyptian authorities are taking to protect its poorest and most vulnerable citizens."
On Wednesday, during a youth dialogue conference in the Suez Canal city of Ismailia, Prime Minister Ismail said that the funds dedicated to subsidies from the state budget stand at EGP 278 billion this year, and are expected to rise to EGP 332 billion in the 2017/2018 budget.
Ismail added that 48 percent of the state budget is dedicated to subsidies and paying public sector employees, 31 percent to paying debt service interest rates, and only 22 percent to the rest of the budget's items.
Ismail said that the current efforts the cabinet is taking to make sure that the subsidies reach those who truly deserve it, which involve revising the database for the beneficiaries registered on each subsidy card, resulted in reducing the cards from 84 to 73 million.
In mid 2014, Egypt introduced the food subsidy system, which entitles citizens with smart cards to a monthly ration.