Egypt struggles with first bread subsidy cut in years

STORY: It’s a staple foodstuff in Egyptian homes.

Which means it hurts when bread gets more expensive.

And that’s just what happened - in a very dramatic way - for many households.

On June 1, the Egyptian government quadrupled the price of subsidized bread provided to the poor.

Now the loaves are still available to some 70 million people, priced at less than one U.S. cent.

Even so, shopper Mohamed Abdelaziz says the big increase is hurting:

“Of course, the price hike impacts me, the prices were already affecting me financially. We are barely making it with the current situation. We just rely on God. I try to find a side job to add to my salary, this is the only way to survive, otherwise, you can’t make a living. Of course, the salary itself will not be enough and even with the raise, it won’t cover the increasing prices.”

The price increase was the first for decades.

Egypt’s government says it had to act amid soaring prices for imported wheat.

Previous administrations had feared making the hike, concerned it could spark unrest.

Instead, they tried moves like limiting eligibility for the subsided loaves.

Now poor families face a quadrupling in spending on the staple.

Timothy Kaldas from the Tahrir Institute for Middle East policy says the government is making a mistake:

“Look, social protection in Egypt is already very weak and the bread subsidies are really an essential component of ensuring some degree of food security for the Egyptian population, so while the cost of bread subsidies is not negligible, it’s also not enormous and in terms of the government’s priorities, I think it’s something that should stay until far into the future.”

The government says it is expanding the social security safety net to help compensate.

But critics say the subsidy cuts come after years of heavy spending on infrastructure mega-projects which drove public debts ever higher.

Now the increase comes on top of rising utility bills, leaving Egypt's poor families with even less money to pay for the next meal.