Economic Growth is Making Many Egyptians Poorer

If Egypt is the Middle East’s fastest-growing economy, why are so more and more Egyptians becoming poorer? The question has exercised economists since the country’s statistics authority released figures on poverty rates indicating a 5% rise over the past three years. This is a period in which growth has spiked, thanks in no small part to a continuously rising foreign debt.

It is easy to interpret the poverty numbers as the social impact of the International Monetary Fund-prescribed reform program that kicked off in November, 2016, including the massive devaluation of the pound, followed by rounds of subsidy cuts and increases in consumption taxes. These measures, some commentators argue, have impoverished many Egyptians, despite the stable macroeconomic indicators—for instance, inflation is under control, interest rates have been reduced, and the exchange rate has been steady.