Enhancing Equity for Children in the Context of the Energy Subsidy Reform in Egypt (2014)

Highlights

Since January 2011, Egypt is in the midst of a period of profound change and complex transition. In response to popular demands, the Egyptian government has implemented major policies: extended subsidies, public wage increases, tax cuts and infrastructure work. However, this spending has resulted in increased fiscal deficits5 and the depletion of fiscal reserves. This has resulted in a strain between the governments’ efforts to improve living standards and their official commitment to reining in the budget deficit. Consumption subsidies represent a particularly heavy fiscal burden, recently reaching 10% of GDP in Egypt (Ministry of Finance, 2012). While subsidy reform has been on the government agenda for a long time, the growing fiscal pressure has made reform more urgent. In 2013, the government stablished and began to implement a plan to progressively rationalize these subsidies