Cairo: Egypt’s economy has been in crisis for years, but as the latest round of International Monetary Fund-backed reforms bites, much of the country’s middle class has found itself struggling to afford goods once considered basics.
The world lender has long backed measures in Egypt including a liberal currency exchange market and weaning the public away from subsidies.
On the ground, that has translated into an eroding middle class with depleted purchasing power, turning into luxuries what were once considered necessities.
Nourhan Khaled, a 27-year-old private sector employee, has given up “perfumes and chocolates.”
“All my salary goes to transport and food,” she said as she perused items at a west Cairo supermarket, deciding what could stay and what needed to go.
For some, this has extended to cutting back on even the most basic goods — such as milk.
“We do not buy sweets anymore and we’ve cut down on milk,” said Zeinab Gamal, a 28-year-old housewife.
Most recently, Egypt hiked fuel prices by 17.5 percent last month, marking the third increase just this year.
Mounting pressures
The measures are among the conditions for an $8 billion IMF loan program, expanded this year from an initial $3 billion to address a severe economic crisis in the North African country.
“The lifestyle I grew up with has completely changed,” said Manar, a 38-year-old mother of two, who did not wish to give her full name.
She has taken on a part-time teaching job to increase her family’s income to 15,000 Egyptian pounds ($304), just so she can “afford luxuries like sports activities for their children.”
Her family has even trimmed their budget for meat, reducing their consumption from four times to “only two times per week.”
Egypt, the Arab world’s most populous country, is facing one of its worst economic crises ever.
Foreign debt quadrupled since 2015 to register $160.6 billion in the first quarter of 2024. Much of the debt is the result of financing for large-scale projects, including a new capital east of Cairo.
The war in Gaza has also worsened the country’s economic situation.
Repeated attacks on Red Sea shipping by Yemen’s Houthi rebels in solidarity with Palestinians in Gaza have resulted in Egypt’s vital Suez Canal — a key source of foreign currency — losing over 70 percent of its revenue this year.
Amid growing public frustration, officials have recently signalled a potential re-evaluation of the IMF program.
“If these challenges will make us put unbearable pressure on public opinion, then the situation must be reviewed with the IMF,” President Abdel Fattah El-Sisi said last month.
Prime Minister Mostafa Madbouly also ruled out any new financial burdens on Egyptians “in the coming period,” without specifying a timeframe.
Economists, however, say the reforms are already taking a toll.
Wael Gamal, director of the social justice unit at the Egyptian Initiative for Personal Rights, said they led to “a significant erosion in people’s living conditions” as prices of medicine, services and transportation soared.
He believes the IMF program could be implemented “over a longer period and in a more gradual manner.”
’Bitter pill to swallow’
Egypt has been here before. In 2016, a three-year $12-billion loan program brought sweeping reforms, kicking off the first of a series of currency devaluations that have decimated the Egyptian pound’s value over the years.
Egypt’s poverty rate stood at 29.7 percent in 2020, down slightly from 32.5 percent the previous year in 2019, according to the latest statistics by the country’s CAPMAS agency.
But Gamal said the current IMF-backed reforms have had a “more intense” effect on people.
“Two years ago, we had no trouble affording basics,” said Manar.
“Now, I think twice before buying essentials like food and clothing,” she added.
Earlier this month, the IMF’s managing director Kristalina Georgieva touted the program’s long-term impact, saying Egyptians “will see the benefits of these reforms in a more dynamic, more prosperous Egyptian economy.”
Her remarks came as the IMF began a delayed review of its loan program, which could unlock $1.2 billion in new financing for Egypt.
Economist and capital market specialist Wael El-Nahas described the loan as a “bitter pill to swallow,” but called it “a crucial tool” forcing the government to make “systematic” decisions.
Still, many remain skeptical.
“The government’s promises have never proven true,” Manar said.
Egyptian expatriates send about $30 billion in remittances per year, a major source of foreign currency.
Manar relies on her brother abroad for essentials, including instant coffee which now costs 400 Egyptian pounds (about $8) per jar.
“All I can think about now is what we will do if there are more price increases in the future,” she said.
Egypt’s middle class cuts costs as IMF-backed reforms take hold
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Egypt’s middle class cuts costs as IMF-backed reforms take hold
- The world lender has long backed measures in Egypt including a liberal currency exchange market and weaning the public away from subsidies
Iraq blast kills three security personnel: officials
A blast from an explosive device on Sunday killed three members of Iraq’s security forces and wounded three others in the northern province of Salaheddin, officials said.
There was no immediate claim of responsibility for the attack in Tuz Khurmatu, which borders a province plagued by sporadic jihadist attacks.
Iraq declared victory over the Daesh group in late 2017, but its jihadists remain active in the country, particularly in rural areas.
Sunday’s blast killed an army regiment commander, another officer and a security service member, said Zulfiqar Al-Bayati, mayor of Tuz Khurmatu.
A security official confirmed the death toll to AFP, adding the victims had been in a vehicle when the explosion occurred.
Those killed were members of the Peshmerga forces of the autonomous northern region of Kurdistan, while the wounded were members from the Iraqi army.
The Iraqi defense ministry paid tribute to the three soldiers who “fell as martyrs... while carrying out their duty.”
The Daesh group overran large swathes of Iraq and neighboring Syria in 2014, proclaiming its “caliphate” and launching a reign of terror.
It was defeated in Iraq in 2017 by Iraqi forces backed by a US-led military coalition, and in 2019 lost the last territory it held in Syria to US-backed Kurdish forces.
A report by United Nations experts published in July estimated there were around 1,500 to 3,000 jihadists remaining in Iraq and Syria.
Gaza civil defense says 26 dead, 59 missing after Israeli air strike
- The Gaza health ministry said 43,799 people have been confirmed dead since Oct. 7, 2023
GAZA STRIP: Gaza’s civil defense said 26 people were killed on Sunday, including children, and at least 59 were missing after an Israeli air strike hit a building in the Palestinian territory’s north.
Following the strike early Sunday, 26 bodies were pulled from the rubble of the five-story residential building in Beit Lahia, “including children and women,” civil defense spokesman Mahmud Bassal told AFP.
He added that at least 59 people were still trapped under the debris.
AFP images showed men covered in dust scrambling to reach people under the rubble, while some of the bodies were taken away on a donkey-pulled cart.
Other AFP images showed the flattened building with broken concrete and twisted metal sticking out from the ruins as more bodies covered in blankets lay nearby.
Hamas, which runs the territory, accused Israel of committing a “massacre” which it said is “a continuation of the genocidal war and revenge against unarmed civilians.”
Earlier on Sunday, Gaza’s civil defense said other Israeli strikes killed at least 20 people, including four women and three children, across the war-torn territory.
Hamas-run Gaza’s health ministry on Sunday said the overall death toll in more than 13 months of war had reached 43,846.
The majority of the dead are civilians, according to ministry figures, which the United Nations considers reliable.
Hamas’s October 7, 2023 attack that sparked the war resulted in the deaths of 1,206 people, mostly civilians, according to an AFP tally of Israeli official figures.
Lebanon state media reports Israeli strike on central Beirut district
- Strike targeted ‘the Lebanese branch of the Syrian Baath party,’ whose office is located ‘in an apartment’
BEIRUT: Lebanese state media reported an Israeli strike on a central Beirut district on Sunday, as a security source said it targeted the Lebanese branch of the Syrian Baath party.
“The enemy carried out a strike on Ras Al-Nabaa,” the official National News Agency said, an area near the French embassy and a university. The security source, requesting anonymity, said the strike targeted “the Lebanese branch of the Syrian Baath party,” whose office is located “in an apartment.”
The strike killed Hezbollah’s media relations chief Mohammad Afif, two Lebanese security sources told Reuters.
An Israeli strike also hit south Beirut on Sunday where the military said it targeted Hezbollah, hours after the Iran-backed group said it fired on Israeli bases around the city of Haifa.
A column of smoke rose over the capital’s southern suburbs, AFPTV footage showed, following a warning from the Israeli military for residents to evacuate three areas.
Further south, overnight Israeli airstrikes and artillery shelling hit the flashpoint southern town of Khiam, some six kilometers (four miles) from the border, Lebanon’s state-run National News Agency reported early Sunday.
The bombardment came after Israel’s military reported a “heavy rocket barrage” on Haifa late Saturday and said a synagogue was hit, wounding two civilians.
Israel has escalated its bombing of Lebanon since September 23 and has since sent in ground troops, following almost a year of limited, cross-border exchanges of fire begun by Iran-backed Hezbollah militants in support of Hamas in Gaza.
In the Palestinian territory, where Hamas’s attack on Israel triggered the war, the civil defense agency reported 24 people killed in strikes Saturday.
Police in Israel said three suspects were arrested after two flares landed near Prime Minister Benjamin Netanyahu’s residence in the town of Caesarea, south of Haifa, but he was not home.
The incident comes about a month after a drone targeted the same residence, which Hezbollah claimed.
Israel’s military chief said Saturday Hezbollah had already “paid a big price,” but Israel will keep fighting until tens of thousands of its residents displaced from the north can return safely.
Beirut’s southern suburbs were veiled in smoke Sunday, following repeated Israeli bombardment a day earlier of the Hezbollah stronghold.
The Israeli military said aircraft had targeted “a weapons storage facility” and a Hezbollah “command center.”
Hezbollah fired around 80 projectiles at Israel on Saturday, the military said.
Lebanon rescuers mourned
Israeli forces also shelled the area along the Litani River, which flows across southern Lebanon, NNA said Sunday.
The agency earlier reported strikes on the southern city of Tyre, including in a neighborhood near UNESCO-listed ancient ruins. Israel’s military late Saturday said it had hit Hezbollah facilities in the Tyre area.
In Lebanon’s east, the health ministry said an Israeli strike in the Bekaa Valley killed six people including three children.
Hezbollah said it fired a guided missile that set an Israeli tank ablaze in the southwest Lebanon village of Shamaa, about five kilometers from the border.
Late Saturday, Hezbollah said it had targeted five military bases including the Stella Maris naval base.
In eastern Lebanon, funerals were held for 14 civil defense staff killed in an Israeli strike on Thursday.
“They weren’t involved with any (armed) party... they were just waiting to answer calls for help,” said Ali Al-Zein, a relative of one of the dead.
Lebanese authorities say more than 3,452 people have been killed since October last year, with most casualties recorded since September.
Israel announced the death of a soldier in southern Lebanon, bringing to 48 the number killed fighting Hezbollah.
Imminent famine
In Hamas-run Gaza, the Israeli military said it had continued operations in the northern areas of Jabalia and Beit Lahia, the targets of an intense offensive since early October.
Israel said its renewed operations were aimed at stopping Hamas from regrouping.
A UN-backed assessment on November 9 warned famine was imminent in northern Gaza, amid the increased hostilities and a near-halt in food aid.
Israel has pushed back against a 172-page Human Rights Watch report this week that said its mass displacement of Gazans amounts to a “crime against humanity,” as well as findings from a UN Special Committee pointing to warfare practices “consistent with the characteristics of genocide.”
A foreign ministry spokesman dismissed the HRW report as “completely false,” while the United States — Israel’s main military supplier — said accusations of genocide “are certainly unfounded.”
The Gaza health ministry on Saturday said the overall death toll in more than 13 months of war had reached 43,799.
The majority of the dead are civilians, according to ministry figures, which the United Nations considers reliable.
Hamas’s October 7, 2023 attack that sparked the war resulted in the deaths of 1,206 people, mostly civilians, according to an AFP tally of Israeli official figures.
Demonstrators in Tel Aviv on Saturday reiterated demands that the government reach a deal to free dozens of hostages still held in Gaza.
The protest came a week after mediator Qatar suspended its role until Hamas and Israel show “seriousness” in truce and hostage-release talks.
Israeli military reports soldier killed in battle north of Gaza on Saturday
CAIRO: The Israeli military said on Sunday that a fighter in the Nachshon Regiment (90), Kfir Brigade, was killed in battle north of Gaza on Saturday.
Israel pummels south Beirut as Hezbollah targets Haifa area
- Israel’s military reported “heavy rocket barrage” on Haifa, saying synagogue was hit
- Lebanese authorities say over 3,452 people have been killed since October last year
BEIRUT: Israel launched a wave of air strikes on Hezbollah bastions in Beirut and south Lebanon on Saturday, as the Iran-backed militants said they fired on several Israeli military bases around the coastal city of Haifa.
Israel’s military reported a “heavy rocket barrage” on Haifa and said a synagogue was hit, injuring two civilians.
Since September 23, Israel has escalated its bombing of targets in Lebanon, later sending in ground troops after almost a year of limited, cross-border exchanges of fire begun by Iran-backed Hezbollah militants in support of Hamas in Gaza.
In the Palestinian territory, where Hamas’s attack on Israel triggered the war, the civil defense agency reported 24 people killed in strikes on Saturday.
Security services in Israel said two flares landed near Prime Minister Benjamin Netanyahu’s residence in the town of Caesarea, south of Haifa, but he was not home.
The incident comes about a month after a drone targeted the same residence, which Hezbollah claimed.
Israel’s military chief, in comments issued Saturday, said Hezbollah has already “paid a big price” but Israel will keep fighting until tens of thousands of its residents displaced from the north can return safely.
“We will continue to fight, to implement plans, to go further, conduct deep strikes, and hit Hezbollah very hard,” Lt. Gen. Herzi Halevi said on a visit earlier in the week to the Kfar Kila area of south Lebanon.
AFPTV footage showed fresh strikes Saturday on the southern suburbs of Beirut, a Hezbollah stronghold, after Israel’s military called on residents to evacuate.
Lebanon’s state-run National News Agency reported a series of strikes.
The Israeli military said aircraft had targeted “a weapons storage facility” and a Hezbollah “command center.”
The NNA also reported strikes on the southern city of Tyre, including in a neighborhood near UNESCO-listed ancient ruins. Israel’s military late Saturday said it had hit Hezbollah facilities in the Tyre area.
In Lebanon’s east, the health ministry said an Israeli strike in the Bekaa Valley killed six people including three children.
Hezbollah said it fired a guided missile which set an Israeli tank ablaze in the southwest Lebanon village of Shamaa, about five kilometers (three miles) from the border.
Late Saturday, after Israel reported the rocket barrage on Haifa, Hezbollah said it had targeted five military bases, including the Stella Maris naval base which it said it fired on earlier in the day.
In eastern Lebanon, funerals were held for 14 civil defense staff killed in an Israeli strike on Thursday.
“They weren’t involved with any (armed) party... they were just waiting to answer calls for help,” said Ali Al-Zein, a relative of one of the dead.
Lebanese authorities say more than 3,452 people have been killed since October last year, with most casualties recorded since September.
Israel announced the death of a soldier in southern Lebanon, bringing to 48 the number killed in fighting with Hezbollah.
In Hamas-run Gaza, the Israeli military said it continued operations in the northern areas of Jabalia and Beit Lahia, the targets of an intense offensive since early October.
Israel said its renewed operations aimed to stop Hamas from regrouping.
A UN-backed assessment on November 9 warned famine was imminent in northern Gaza, amid the increased hostilities and a near-halt in food aid.
Israel has pushed back against a 172-page Human Rights Watch report this week that said its displacement of Gazans amounts to a “crime against humanity,” as well as findings from a UN Special Committee that pointed to warfare practices that “are consistent with the characteristics of genocide.”
A foreign ministry spokesman dismissed the HRW report as “completely false,” while the United States — Israel’s main military supplier — said accusations of genocide “are certainly unfounded.”
The Gaza health ministry on Saturday said the overall death toll in more than 13 months of war has reached 43,799.
The majority of the dead are civilians, according to ministry figures which the United Nations considers reliable.
In Rafah, southern Gaza, Jamil Al-Masry told AFP a house was hit, causing “a massive explosion.”
“We went to the house, only to find it in ruins, with fire raging and smoke and dust everywhere.”
Hamas’s October 7, 2023 attack that sparked the war resulted in the deaths of 1,206 people, mostly civilians, according to an AFP tally of Israeli official figures.
Demonstrators in Tel Aviv on Saturday reiterated demands that the government reach a deal to free dozens of hostages still held in Gaza.
The protest came a week after mediator Qatar suspended its role until Hamas and Israel show “seriousness” in truce and hostage-release talks.
In a rare claim of responsibility for a strike on Syria, Israel said it targeted the Islamic Jihad group on Thursday.
A statement from the group on Saturday confirmed that “prominent leader” Abdel Aziz Minawi and external relations chief Rasmi Yusuf Abu Issa were killed in the air raid on Qudsaya, in the Damascus area.
Islamic Jihad still holds several Israeli hostages taken during the October 7 attack.
Hamas, Hezbollah and Islamic Jihad are all backed by Israel’s arch-enemy Iran, which said Friday it supported a swift end to the nearly two-month war in Lebanon.
With diplomacy aimed at ending the Gaza war stalled, a top government official in Beirut said on Friday that US ambassador Lisa Johnson had presented a 13-point proposal to halt the Israel-Hezbollah conflict.
It includes a 60-day truce, during which Lebanon will deploy troops to the border. The official added that Israel has yet to respond to the plan.
