Economic Crisis in Egypt: Citizens Struggle Amid Rising Costs

The ongoing economic crisis in Egypt has reached alarming levels, affecting the daily lives of its citizens, particularly the middle class. For years, the country has struggled with financial instability, and recent reforms backed by the International Monetary Fund (IMF) have only intensified the challenges faced by many families. As the cost of living continues to rise, what were once considered basic necessities are now luxuries for many.

In recent months, the Egyptian government has implemented a series of economic measures aimed at stabilizing the economy. These include a liberal currency exchange market and a reduction in public subsidies. However, these reforms have led to a significant decline in purchasing power for the average citizen. Nourhan Khaled, a 27-year-old employee in the private sector, shared her experience, stating, "All my salary goes to transport and food." This sentiment is echoed by many who find themselves making tough choices about what to buy.

As prices soar, even the most basic items are becoming unaffordable. Zeinab Gamal, a 28-year-old housewife, lamented, "We do not buy sweets anymore and we’ve cut down on milk." The recent hike in fuel prices by 17.5 percent, marking the third increase this year, has only added to the financial strain on families.

The IMF has tied its $8 billion loan program to these reforms, which were initially set at $3 billion. This financial support is crucial for Egypt, which is grappling with a foreign debt that has quadrupled since 2015, now standing at $160.6 billion. The economic situation has been further exacerbated by the ongoing conflict in Gaza, which has disrupted trade routes and significantly impacted revenue from the Suez Canal.

Amid growing public discontent, President Abdel Fattah El-Sisi has hinted at a possible re-evaluation of the IMF program, stating, "If these challenges will make us put unbearable pressure on public opinion, then the situation must be reviewed with the IMF." However, Prime Minister Mostafa Madbouly has assured citizens that there will be no new financial burdens in the near future.

Despite these reassurances, economists warn that the reforms are already taking a toll on living conditions. Wael Gamal, director of the social justice unit at the Egyptian Initiative for Personal Rights, noted that the rising prices of essential goods and services have led to a "significant erosion in people’s living conditions." Many families are now forced to cut back on their consumption of meat and other staples.

Historically, Egypt has faced similar economic challenges. In 2016, a $12 billion loan program initiated sweeping reforms that led to a series of currency devaluations, severely impacting the value of the Egyptian pound. While the poverty rate saw a slight decrease, the current reforms have had a more intense effect on the population. Manar, a 38-year-old mother, reflected on the changes, saying, "Two years ago, we had no trouble affording basics. Now, I think twice before buying essentials like food and clothing."

As the IMF begins a delayed review of its loan program, which could unlock an additional $1.2 billion for Egypt, many remain skeptical about the promised benefits. Economist Wael El-Nahas described the loan as a "bitter pill to swallow," yet acknowledged its necessity for systematic government reforms. However, the lingering question remains: will the government’s promises hold true this time?

The economic landscape in Egypt is fraught with challenges that affect the daily lives of its citizens. As families navigate rising costs and dwindling resources, the hope for a more stable and prosperous future hangs in the balance. The situation serves as a reminder of the delicate interplay between economic policies and the well-being of the populace, highlighting the need for sustainable solutions that prioritize the needs of the people.