MONEY had already been tight as food and electricity bills climbed for weeks. So Ashraf Mahrous, a 45-year-old civil servant, warned his wife, “Black days are ahead,” when Egypt floated its pound and hiked fuel prices this month.
Mahrous is now looking for a side job. Rising inflation has forced him to stop eating chicken and borrow cash from friends to make ends meet. He also gave up his regular evening cafe visits and slashed his son’s allowance.
“We can no longer survive on my salary,” Mahrous, a father of two, said. “The situation is very, very, very difficult.”
Struggling to cope with price increases, some Egyptians are scrimping on meals, buying used clothes or considering moving their children to cheaper schools. Even the better off are feeling the pinch. And more price jumps are likely amid a slew of economic decisions designed to revive a battered economy, lure back investors and end a dollar crunch.
Egypt recently took what many economists say is the necessary step of floating its pound and cutting fuel subsidies as it sealed a $12 billion loan deal with the International Monetary Fund. The Egyptian pound quickly lost about half its value, plunging to around 18 to the dollar, in a country heavily dependent on imports ranging from food items to raw materials. With salaries remaining largely the same, nearly everyone in the country effectively had a sudden, large pay cut.
Multiple previous governments had balked at such moves for fear of stoking unrest. The devaluation came after other steps that increased prices — the introduction of a value-added tax and hike in household electricity prices.
While the challenges of the poor dwarf those facing the more affluent, they too say they are increasingly feeling burdened.
Winter clothes’ prices this season inspired 30-year-old Nilly Zaher to create “Women Against Price Increases,” a Facebook group to sell or barter used apparel. It drew more than 900 members since it was founded more than a month ago. Already, the group has expanded to include books and electronics.
“The floating of the pound and talk of even more inflation will probably give rise to more such ideas,” she said.
Osman Badran, founder and managing director of a branding agency, says his family’s grocery bills have ballooned and he’s had to scale back on outings. But it’s his three children’s education that keeps him up at night.
The pound’s plunge meant that their dollar-pegged tuition at a local American school instantly doubled. Unless a deal is reached with the school, parents would have to pay the new Egyptian-pound equivalent of an average of $11,000 per year for each kid, he said. He is now looking into transferring the children.
“Inflation is higher than incomes and salary increases,” he said. “The moment the price of the dollar goes up, everything else shoots up.”
To be sure, not everyone is penny-pinching and trendy street-side cafes in upscale neighborhoods like Zamalek and Heliopolis still teem with customers huddled around lattes, burgers or water pipes.
Still, inflation has prompted calls for a boycott of all purchases on Dec. 1 as some blame the hikes on the greed of merchants.
Mervat Makar, who is heeding appeals to refrain from all purchases that day, says the government must monitor prices. “We feel like we’re under the mercy of the traders and their whims,” she said.
Even Egypt’s “food of the poor,” a staple of cooked fava beans called ful, has been hit, said one vendor, Ashour Kamel. He said he can’t raise prices — some regulars are already cutting back on orders — but higher costs of ingredients from oil to potatoes are chipping away at profits.
“People cannot afford stuff anymore,” he said. “You want to make changes, fine, but don’t slaughter us.” — AP
