DUBAI, United Arab Emirates (AP) — Stores are selling winter clothes from last season in the middle of summer. Repair shops lack spare parts for appliances. There’s a waiting list to buy a new car.
Egypt, a country of more than 103 million people, is running low on foreign currency needed to buy essentials like grain and fuel. To keep U.S. dollars in the country, the government has tightened imports, meaning fewer new cars and summer dresses.
For the nearly third of Egyptians living in poverty, and the millions more in poor conditions, the country’s economic woes mean life is much harder than off-season shopping — they’re finding it harder to put food on the table. A decade after deadly protests and political upheaval rocked the Middle East’s most populous nation, the economy is still staggering and has taken new hits.
Fatima, a 32-year-old cleaner in Cairo, says her family stopped buying red meat five months ago. Chicken also has become a luxury. She’s borrowing from relatives to make ends meet.
She’s worried about the impact of high prices on Egypt’s social fabric. Asking to be identified only by her first name for fear of reprisal, she worries that crime and theft will increase “because people won’t have enough money to feed themselves.”
For decades, most Egyptians have depended on the government to keep basic goods affordable, but that social contract is under pressure due to the impact from Russia’s war in Ukraine. Egypt has sought loans to pay for grain imports for state-subsidized bread. It’s also grappling with surging consumer prices as the currency drops in value. The threat of food insecurity in the world’s largest importer of wheat, 80% of which comes from the war-torn Black Sea region, has raised concerns.
“In terms of, like, bread in exchange for freedom, that contract got violated a long time ago,” said Timothy Kaldas, an economic expert at the Tahrir Institute for Middle East Policy.
Annual inflation climbed to 15.3% in August, compared with just over 6% in the same month last year. The Egyptian pound recently hit a record low against a strengthening U.S. dollar, selling at 19.5 pounds to $1. That has widened trade and budget deficits as foreign reserves needed to buy grain and fuel plunged by nearly 10% in March, shortly after Russia’s invasion sent commodity prices soaring and investors pulled billions of dollars from Egypt.
Egypt has few options to deal with the hole in its finances. As with previous crises, it’s turned to Gulf Arab allies and the International Monetary Fund for a bailout.
A new IMF loan would buoy Egypt’s dwindling foreign reserves, which have fallen to $33 billion from $41 billion in February. A new loan, however, will add to Egypt’s ballooning foreign debt, which climbed from $37 billion in 2010 — before the Arab Spring uprisings — to $158 billion as of March, according to Egyptian central bank figures.
Leaders blame the challenges on the coronavirus pandemic, which hurt the vital tourism industry, and price shocks sparked by the war in Ukraine. They’ve also faulted revolutionaries and those who may have backed the Muslim Brotherhood.
“Why don’t you want to pay the cost of what you did in 2011 and 2013?” President Abdel Fattah el-Sissi said in televised remarks this month. “What you did — didn’t that negatively impact the economy?”
He was referring to protests, which toppled Egypt’s longtime president, ushered in a divisive Muslim Brotherhood presidency, and resulted in a populist-backed power grab by the military and el-Sissi’s ascension to the presidency.
The former military general said the fallout from those years cost Egypt $450 billion — a price, he said, everyone must bear.
“We solve the matter together. I am saying this to all Egyptians … we are going to finish this matter together and pay its price together,” he said.
Critics, however, argue the government has squandered chances to make real reforms and is overspending on superfluous mega-projects as it builds a new administrative capital. The government has touted the construction boom as a job producer and economic engine.
The state’s hold over the economy and the “outsized role of military-related enterprises” have historically crowded out foreign investors and the private sector, said Hasnain Malik, who heads equity research at Tellimer, an emerging-markets investment analysis firm. The government’s plans to sell off minority stakes in some state-owned enterprises “does not necessarily fix this problem,” he said.
Egypt’s elite can withstand rising costs, living comfortably in Nile-view apartments and gated communities beyond the hustle of Cairo. Life for middle-class Egyptians is deteriorating, said Maha, a 38-year-old tech company employee and mother of two who asked to only be identified by her first name to speak freely.
“I think we will eventually move down the social ladder and end up below the poverty line,” she said.
The government took out a $500 million loan from the World Bank this summer and $221 million from the African Development Bank to help buy wheat. That covers around six weeks of a bread subsidy program supporting 70 million low-income Egyptians.
China assisted with a $2.8 billion currency swap. Saudi Arabia, the United Arab Emirates and Qatar stepped in with pledges of $22 billion in short-term deposits and investments.
“Having what they define as stability in Egypt is in their strategic interests. They really don’t want to go through a repeat of 2011 and its aftermath,” said David Butter, an associate fellow at international affairs think tank Chatham House. Gulf Arab states are also making strategic investments in Egypt for the short and long-term, he said.
The government announced an “extraordinary” social protection program to roll out this month, targeting 9 million families with extended cash transfers and food coupons. This is on top of other assistance programs, including pop-up stands selling subsidized food staples. Officials point to how they managed the supply crunch brought on by the pandemic and the war in Ukraine, saying there is enough wheat and other basic food items for six months.
For some, leaving has promised more hope. Egyptians rank behind only Afghans as the top nationality of “irregular arrivals” to Europe so far this year, according to the International Organization for Migration’s flow chart. Most arrive by sea.
As pressure mounts on the Egyptian pound, the government could devalue the currency again.
“It’s going to hurt. It’s going to increase inflation,” said Kaldas, the Tahrir Institute economic expert. “Subsidies on bread is only one line-item in a family’s budget. So, for a lot of families, this is still going to be a lot of pain.”
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
