Congruence among participants in National Dialogue's inflation session on lowering production costs

CAIRO – 6 September 2023: Participants in the National Dialogue's session on inflation and price hikes demanded Tuesday the detection of price manipulation and monopolistic practices as well as lowering interest rates in order to reduce the cost of production.

The recommendations also extended to issues pertaining to the agricultural sector. One is bolstering the quantities cultivated of rice, lentil, potatoes, tomatoes, beans, linen, and cotton. The other is setting a mechanism for agricultural land tenants to obtain subsidies to inhibit duplication and make the farmer support system more efficient.  

Economic Researcher Ramy al-Galy said that the reasons behind price hikes are the low level of supply, drop in the value of the currency due to floatation, and absence of the role of regulatory bodies.

Galy noted that although the Central Bank of Egypt had raised the interest rate by 11 percent since the beginning of 2022, the inflation rate was still high at 40 percent. Hence, he urged keeping the interest rate at safe levels, stabilizing the exchange rate, lowering the VAT, and controlling money supply.

Member of the Coordination Committee of Parties Youth and Young Politicians Ahmed Samir proposed supporting NGOs to distribute free food staples among low-income citizens. That is in addition to encouraging professional syndicates to sell subsidized food products to its members.

Representative of Al Karama (Dignity) Party, which adopts the socialist ideology, Sherif Qasem argued that the infrastructure projects that had been carried out by the government generated inflation, given their unproductive nature and inability to generate revenues.

Qasem demanded that the government would stop following the instructions of the International Monetary Fund, including the devaluation of the currency, which he considered a main reason behind the current crisis. He also demanded the government to ban any raises of the prices of goods and services for a year or two.

Representative of Al Gil (The Generation) Party Nader Khedr shared the same point of view on the exchange rate, and equally, criticized raising the interest rate to cope with that of the Federal Reserve. He stipulated that the focus must be on reducing production costs in order to lower consumer prices.

In addition, Khedr pointed out that the high deposit interest rate, currently 19.25 percent, incurred public debts worth LE60-80 billion, which cornered the government to cut subsidies granted to vulnerable citizens.  

Further, the politician said that tariffs must be paid in the Egyptian pound and not in the U.S. dollar as such policy had made the currency black market flourish.