The price of subsidized bread has quadrupled, making it more difficult than ever for millions of Egyptians to make ends meet.
People were having difficulty making ends meet even before Egypt’s government raised the price of subsidized tiny loaves of flatbread on June 1 for the first time in decades due to an increasing wheat import bill.
More than 70 million people have access to the loaves, which are essential for the most impoverished. Many households find it difficult to afford the increase from five piasters to twenty piasters ($0.0042) per loaf, even with the steep discount. Millions of people will be impacted by the price hike because the 106 million people living in the country rely heavily on the subsidised loaves.
In a nation where poverty is pervasive, raising the price of the subsidized bread was a politically delicate move that had been postponed for years. Cheap bread is crucial for many people.
Despite several rounds of austerity reforms, the price had remained constant since the 1980s because the government was afraid of the public’s reaction. In 1977, there were riots caused by an attempt to alter the subsidy scheme.
The government had previously attempted to limit eligibility and lighten the loaves’ weight rather than raising the price.
With annual inflation reaching 38% in September of last year and currently running at 32.5% in April, the government took action. Egypt permitted a significant currency devaluation in March, when it switched to a system of adjustable exchange rates, and is also faced with a huge debt servicing cost.
