The World Bank welcomed on Friday the Egyptian economic reforms, saying they would create jobs and promote social inclusion, an announcement made 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 has floated the local pound and raised interest rates by 300 points, 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 showed.
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 would 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 18 to 21 Egyptian pounds starting next month.
Minister of Finance Amr e-Garhy said the increase in individual shares in the smart-card system for subsidised food will increase the state budget in this category from 44 billion to 50 billion pounds.
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.
