While price increases and inflation are inevitable for any country, in recent months Egypt has seen unprecedented price hikes which have severely impacted families’ cost of living. In the wake of the Egyptian pound flotation, subsidy cuts, and higher fuel prices, the average family’s monthly income does not stretch nearly as far as it used to. This is compounded by shortages in medicines and basic commodities which have pushed many Egyptians to resort to the unofficial market for hard-to-find items, often at exorbitant prices.
Unfortunately for Egyptians, it’s likely that making ends meet will continue to be a struggle, so what can be done to absorb the high cost of living?
Economic expert Hany Tawfik advises lower- to middle-income families to increase their work hours so as to earn more money and channel this extra income into buying necessities.
He also advises switching to cheaper locally-produced products, buying fruit and vegetables by the piece rather than per kilo, and eliminating non-essential items from the family shopping list.
Tawfik added that some families should consider sending their children to less expensive schools as long as these can still provide a fair quality of education.
According to this expert, it seems that Egyptians should resign themselves to a meagre existence. As many companies have fallen behind on paying employees’ salaries, it is unlikely that many will be able to offer overtime. While some citizens may be able to find the time for another job on the side—if the opportunities are there—the effort may not be worth the paltry income, especially when unofficial or fraudulent work can be far more lucrative.
Offering a different point of view is Reham El-Desoky, senior economist at Arqam Capital investment bank in Cairo. She said that lower- to middle-income families in Egypt cannot escape the negative effects of the rising inflation rate.
She suggests that families which have cash reserves could invest in bank certificates that provide high interest rates, helping them to meet some of the higher costs.
However, families without reserves don’t have much of a choice but to shop at stores that sell essentials at lower prices.
She believes that the poorest segments in society are already trying to find other sources of income to support themselves. She said: “They already know the importance of doing without non-essentials like ‘Halawet El-Moled’ [traditional sweets for Prophet Muhammad’s birthday celebrations].”
The economist advocates for a change in societal norms, such as expensive weddings, if families have limited money as it would be better for them to devote their hard-earned money to more practical assets rather than one day of celebrations.
Tawfik remains optimistic, however, saying that there’s no time like the present for start-ups and enterprises as Egypt’s market size of 90 million people creates demand and opportunities for growth.
“I have seen a great deal of small projects begin their work in recent weeks,” he said, adding that the recent flotation will increase the start-ups’ ability to export their products.
Of course, not everyone can start their own enterprise. Tawfik advocates the importance of finding another source of income for those who cannot increase their working hours or start their own businesses.
In the medium-term, more local and foreign investments into the market will increase the number of job vacancies as projects take off across Egypt. Tawfik said the government is determined to improve the investment climate, primarily through implementing reforms.
“Now is the time for hard work; there will be no place for those who prefer to idly spend their days in coffeehouses,” the expert said.