The country, which imports from Russia and Ukraine the essentials of wheat and sunflower oil that it consumes, saw the price of its food climbing by 20%.
Le Monde with AFP
Egypt, affected by the rise in commodity prices related to the invasion of Ukraine by Russia, will request the financial support of the International Monetary Fund, the institution mentioned Wednesday, March 23rd .
“The global rapidly evolving environment and the share-related impacts in Ukraine pose important challenges for countries around the world, including Egypt, explained the IMF’s chief of mission in the country, Céline Allard, in a statement. In this context, the Egyptian authorities have requested the support of the International Monetary Fund (IMF) to implement their overall economic program. “
Egypt strongly depends on imports of wheat and sunflower oil from Russia and Ukraine and undergoing the current outbreak of commodity prices. The inflation rate reached 10% year-over-year in February, mainly due to a rise in food prices by 20%.
Drastic austerity measures
“A set of macroeconomic and structural political measures would mitigate the impact of this shock on the Egyptian economy, would protect vulnerable people and preserve the resilience and prospects for medium-term growth from Egypt,” said M ME ALLARD. To this end, the recent measures taken by the authorities to expand targeted social protection and implement the flexibility of the exchange rate are welcome measures. “
Inflation continues to increase in Egypt since the launch in November 2016 of a reform program under the Aegis of the IMF. This institution then granted Cairo a loan of nearly € 11 billion in exchange for drastic austerity measures, including a sudden devaluation and revision of the system of subsidies on essential commodities.
The IMF also approved an aid program in 2020 a total amount of 4.9 billion euros to address the impact of the coronavirus pandemic, with Egypt that has been particularly affected by The brutal stopping tourism and air transport. The last slice was released in June 2021.