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Egyptians are struggling against worst inflation in decade

Egyptians are struggling against worst inflation in decadeEgyptians are bearing down under their worst inflation in a decade, cutting spending as much as possible, as prices on basic food items, transport, housing, and even some essential medicines are surging.

This is reported by Associated Press.

Inflation reached almost 30 percent in January, up five percent over the previous month, driven by the floatation of the Egyptian pound and slashing of fuel subsidies enacted by President Abdel-Fattah el-Sissi in November.

The move was part of a reform package to secure an IMF bailout loan of $12 billion desperately needed to shore up investor confidence and overhaul the economy. Immediately after the floatation, the pound lost over half its value, making a wide range of Egypt's many imported goods double in price.

Food and drinks have seen some of the largest increases, costing nearly 40 percent more since the floatation, figures from the statistics agency show. Some meat prices have leapt nearly 50 percent.

Nearly a third of Egypt's population of 92 million people lives under the U.N. poverty line of $1.9 a day.

There have been some positive signs since the shock reforms were enacted. Investors have flocked to buy Egyptian bonds, and foreign reserves are rising. The pound has regained some strength, trading around 16 per dollar as opposed to nearly 20 in late December. People have changed buying habits, purchasing local goods, instead of imports, rendered more expensive by both the exchange rate and newly imposed high import tariffs.

Economists, the government and the IMF predict inflation will ease later this year.
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