Egyptian PM: Gov’t capable of tackling impacts of Russia-Ukraine crisis

CAIRO - 9 March 2022: Egypt’s Prime Minister Mostafa Madbouli said on Wednesday that the government is capable of tackling a large part of the impact of the Russia-Ukraine crisis on the country.

The Russia-Ukraine crisis has cast a negative shadow over the world and had a negative impact on Egypt, Madbouly said in a press conference, highlighting the government’s efforts to absorb a huge part of the inflation caused by the crisis through the state budget.

Since 2008, the global economy has been experiencing a lot of crises, the latest of which are the coronavirus spread, the inflation crisis, the disruption of supply chains, the high cost of shipping, in addition to the increase in world prices, the prime minister said.

He added that the world has witnessed price jumps not seen in decades over the past 14 days, noting that global wheat prices surged 48 percent with the price of a ton increasing by $100.

Global prices of corn rose 30 percent, those of soybeans increased 24 percent, sugar grew 7 percent, frozen meat climbed 11 percent, pourtly were up 10 percent, and oil skyrocketed 55 percent, he pointed out.

In the same regard, the prime minister said the government is aware of citizens' complaints about price hikes, noting that prior to the Russia-Ukraine crisis and its accompanying inflationary crisis the government was working around the clock to absorb the largest possible impact of inflation waves.

Madbouli added that 35 percent of inflation seen in Egypt is imported from the rest of the world.

He noted that wheat prices in Egypt rose 17 percent only, while its global prices jumped 48 percent.

During the conference, Finance Minister Mohamed Maait said that Egypt's public treasury and budget are capable of dealing with the Russian-Ukrainian conflict.

The finance minister said that Egypt's budget reserves are now standing at EGP 170 billion after President Abdel Fattah El Sisi directed to increase them by at least 50% last year.

He added that the reserves will cover the recent increase in wheat prices by allocating an additional EGP 15 billion.

According to Maait, coordination is maintained with the Ministry of Petroleum and Mineral Resources to secure Egypt's needs of petroleum products.

Egypt's budget is performing well, the minister said, citing the increase in growth rates despite the Covid-19 pandemic.

Maait further expected that the positive indicators of the budget would contribute to reducing the debt levels, achieving a primary surplus and dealing with the Russian-Ukrainian crisis wisely.

MENA contributed to the reporting.