Advertisement
| 12 June, 2018

Egypt cuts electricity subsidies, raises prices for FY 2018-19: minister

Electricity costs for factories would rise about 41.8% and for households 20.9%

The headquarters of Egypt's foreign ministry and the Egyptian Radio and Television Union (ERTU) "Maspero" are seen by the river Nile in Cairo, Egypt April 25, 2018.
Image used for illustrative purpose.

The headquarters of Egypt's foreign ministry and the Egyptian Radio and Television Union (ERTU) "Maspero" are seen by the river Nile in Cairo, Egypt April 25, 2018. Image used for illustrative purpose.

REUTERS/Mohamed Abd El Ghany

CAIRO- Egypt on Tuesday announced new cuts to its electricity subsidies, raising prices by an average of 26 percent for the 2018-2019 fiscal year beginning in July.

Electricity Minister Mohamed Shaker said electricity costs for factories would rise by about 41.8 percent and for households by 20.9 percent.

Egypt has committed to deep cuts to energy subsidies as part of a three-year, $12 billion International Monetary Fund (IMF) loan programme it began in late 2016.

The government has said its electricity subsidies will be phased out completely by the end of the 2021-2022 fiscal year.

Advertisement
The IMF has praised Egypt's tough fiscal reforms, which included a currency float in late 2016. The Egyptian pound lost half its value after the float, reducing many Egyptians' spending power.

Economists see some grounds for hope in reviving the economy, which was hit by years of unrest that followed a 2011 popular uprising.

Egypt's GDP growth for the third quarter of the 2017-2018 fiscal year rose to 5.4 percent from 4.3 percent in the same period a year earlier, the planning ministry said last month. 

(Reporting by Nadine Awadalla; editing by Alison Williams and Jason Neely) ((Nadine.Awadalla@thomsonreuters.com;))