Egypt's economy pushed to brink
Dubai: Stores are selling winter clothes from last season in the middle of summer. Repair shops lack spare parts for appliances. There's a waiting list to buy a new car.
Egypt, a country of more than 103 million people, is running low on foreign currency needed to buy essentials like grain and fuel. To keep US dollars in the country, the government has tightened imports, meaning fewer new cars and summer dresses.
For the nearly third of Egyptians living in poverty, and the millions more in poor conditions, the country's economic woes mean life is much harder than off-season shopping they're seeing less food on the table.
A decade after deadly protests and political upheaval rocked the Middle East's most populous nation, the economy is still staggering and has taken new hits.
Fatima, a 32-year-old cleaner in Cairo, says her family stopped buying red meat five months ago. Chicken also has become a luxury. She's borrowing from relatives to make ends meet.
If prices keep rising, the country will fall and won't be safe anymore, she said, asking to be identified only by her first name for fear of reprisal.
She worries that crime and theft will increase because people won't have enough money to feed themselves .
For decades, most Egyptians have depended on the government to keep basic goods affordable, but that social contract is under threat as the impact from Russia's war in Ukraine leaves Egypt struggling to pay for grain imports for state-subsidised bread.
It's also grappling with surging consumer prices as the currency drops in value. The threat of food insecurity in the world's largest importer of wheat, 80 per cent of which comes from the war-torn Black Sea region, has raised concerns of instability.
In terms of, like, bread in exchange for freedom, that contract got violated a long time ago, said Timothy Kaldas, an economic expert at the Tahrir Institute for Middle East Policy.
Annual inflation climbed to 15.3 per cent in August, compared with just over 6 per cent in the same month last year.
The Egyptian pound recently hit a record low against a strengthening US dollar, selling at 19.5 pounds to USD 1.
That has widened trade and budget deficits as foreign reserves needed to buy grain and fuel plunged by nearly 10 per cent in March, shortly after Russia's invasion sent commodity prices soaring and investors pulled billions of dollars from Egypt.
Egypt has few options to deal with the hole in its finances. As with previous crises, it's turned to Gulf Arab allies and the International Monetary Fund for a bailout.
A new IMF loan would buoy Egypt's dwindling foreign reserves, which have fallen to USD 33 billion from USD 41 billion in February.
