Egypt Raises Subsidized Bread Price for First Time in Decades

(Bloomberg) -- Egypt raised the price of subsidized bread for the first time in decades, taking aim at a key public-support measure that previous governments had shied away from for fear of stoking unrest.

Most Read from Bloomberg

The price of a subsidized loaf of bread will rise to 20 piasters per loaf (0.42 US cents) starting June 1, climbing from 5 piasters, Prime Minister Mostafa Madbouly said Wednesday in a televised press conference. Madbouly said the government was also looking at a shift to a cash-payment system instead of the current subsidy program.

Read More: Penny-a-Loaf Bread Could See Price Hike as War Chokes Off Wheat

The premier said while the cost of the loaf will remain subsidized, the move was necessary for the government to continue to be able to provide a support network on which the overwhelming majority of the nation’s 105 million people relies.

Read More: Egypt’s $50 Billion Rescue Betrays Depth of Its Economic Crisis

Egyptian officials have been gradually lifting state support for several key services, including fuel and electricity. But they had largely steered clear from a direct hike in bread prices — a decision that stoked riots in the late 1970s and forced then-President Anwar Sadat to reverse course.

The decision to curb subsidies is a key part of the government’s push to cut spending after securing $57 billion in investments and aid from the United Arab Emirates, the International Monetary Fund and others as part of a broad economic reform program.

Most Read from Bloomberg Businessweek

©2024 Bloomberg L.P.