Wednesday, April 2, 2008

Egypt boiling

"The government has sought to address the discontent in several ways. It
is especially attempting to improve subsidy provision, separating the
production and sale of subsidised bread--the main element in the
Egyptian diet--in order to reduce corruption. Families were allowed to
add children to their ration cards in February for the first time since
1988 (increasing the total number of beneficiaries from 40m to an
estimated 55m). Nevertheless, as rising wheat prices force more and
more people to rely on subsidised bread, the queues are lengthening and
supplies are coming under strain. Similar problems have also arisen
regarding diesel fuel, which is used to power machinery and farm
equipment. Shortages have led to outbreaks of fights at petrol
stations, and accusations that the government is deliberately keeping
stocks hidden to boost prices.

Consumer price inflation rose again in February, to 12.1% year on year,
up from 10.5% in January. The month-on-month increase was 1.8% in
February, compared with 4% in January. Food prices, which account for
40% of the basket of goods used to calculate consumer price inflation,
rose by 16.8% year on year in February, similar to the 16.2%
year-on-year increase recorded in January."

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