Business activity in Egypt shrank for the third month in a row in May, signalling how fragile the Egyptian economy remains as former army chief Abdel Fattah Al Sisi takes over the reins as president. The country’s economy has been hit by more than three years of political and economic turmoil following the 2011 unrest that ousted former president Hosni Mubarak.
A press conference was held by the government this week revealed the intensity of the economic situation in Egypt.
A host of steps were announced aiming to balance the budget and reduce expenditure.Two new taxes were ratified this week. A tax on capital gains in the stock market.
The second was the real estate tax, postponed for 5 years. To reduce subsidies on energy, the government increased price of gas for homes and electricity for homes and heavy industry. Subsidies on fuel for cars will also be reduced over 5 years.
The governemnt insisted that these measures will only affect the rich to create social justice. Egypt has only been relying on loans and grants from Gulf states to help keep the economy floating. The new measures, however, have been well received by the IMF.
A statement by the institution said the new policies adhere to the conditions set to offer loans and technical assistance to Egypt, frozen for 3 years.