Egypt will raise the price of subsidised bread from 5 piastres to 20 piastres a loaf from June 1, Prime Minister Mostafa Madbouly announced on Wednesday, as the country grapples with economic challenges and the need to reduce the burden of subsidies on the state budget.
Bread is one of the staple food items in Egypt, where more than 70 million of the country's 105 million people are entitled to state-subsidised bread.
Mr Madbouly said during a press conference at the New Administrative Capital that the price of subsidised bread has not been adjusted for more than 30 years. The government spends 100 billion Egyptian pounds ($2.1 billion) annually on bread subsidies, while the scheme generates just 5 billion Egyptian pounds in revenue.
He said the state remains committed to providing subsidies for essential commodities, but that the government is looking to rationalise the subsidy programme and is considering a shift towards a cash subsidy system.
Discussions will begin on how to transition from in-kind subsidies to cash subsidies, with the aim of forming a programme by the end of the year and beginning to implement it in the 2025-2026 fiscal year, Mr Madbouly said.
The move comes just days after President Abdel Fattah El Sisi raised pensions by 15 per cent.
It also comes amid growing discontent among Egyptians over repeated power cuts, which Mr Madbouly said would cease by November or December.
He also said pricing equations linked to inflation and global prices enable the state to increase the amount of subsidies provided to citizens.
Mr Madbouly said the country's rate of population increase is too high for the state's budget to handle and that the subsidy programme needs to be reformed.
Wednesday's announcement comes a day after the Prime Minister said that it was “impossible” for the state subsidy programme to continue as it is, hinting that subsidies on diesel would also be implemented.
Many Egyptians are struggling financially as the country experiences a protracted economic crisis with high inflation and rising cost of living.
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