(Bloomberg) -- Egyptian President Abdel-Fattah El-Sisi said his government will enact sweeping measures to help families struggling with rising prices as they brace for the Muslim holy month of Ramadan with inflation already at the highest level in at least two decades.
The measures include tax breaks and increasing subsidized food, El-Sisi said in an interview published in Wednesday’s edition of the state-run Al-Ahram newspaper. Food prices usually increase in Ramadan, which starts later this month, with Muslims typically breaking their fast with daily feasts.
With around half the population living near or below the poverty line, the measures are an attempt to ward off unrest fueled by an economic program authorities say is necessary to restore investor confidence and create jobs. The pound has lost half of its value since the central bank abandoned currency controls in November, a step that was crucial to secure a $12 billion International Monetary Fund loan.
Annual inflation has accelerated to more than 30 percent, one of the highest rates across emerging markets.
“We’re moving aggressively to face the rise in prices,” El-Sisi said. The measure will enable citizens to “deal with the effect of the economic reforms,” he said.
The IMF, while lauding Egypt’s efforts, has stressed the need to deal with inflation, even as the government is planning further increases in the price of subsidized fuel and electricity.
The government expects inflation to average 22.8 percent in the fiscal year starting July 1, Deputy Finance Minister Ahmed Kouchouk said in an interview Tuesday. The rate will then drop to below 10 percent in the following year, he said.
El-Sisi, elected a year after a military-backed uprising pushed Islamist President Mohamed Mursi from power, has repeatedly urged Egyptians to show patience and not to allow critics from subverting the progress the government is making in shoring up the economy.
Egyptians “will not give up on their country,” according to El-Sisi. They “are ready to suffer for the sake of a better future for their children,” he said.