Egypt can no longer afford stop-gap economic measures, PM says

Prime Minister Sherif Ismail said on Friday Egypt "no longer has the luxury" of being able to postpone difficult economic decisions such as its plan to phase out subsidies over five years.

A day after the central bank floated the Egyptian pound and the government raised fuel prices, Ismail said he aimed to cut a subsidy bill that currently totals 201 billion Egyptian pounds ($12.97 billion) a year, to free up cash for other spending. He and other ministers also announced changes to some tariffs and subsidies at a news conference in Cairo.

"Yesterday was an important day in the history of the Egyptian economy, with the moves in foreign currency and petroleum prices," Ismail said. On Thursday, Egypt devalued the pound from a peg of 8.8 pounds to the dollar to an initial guidance rate of 13, before allowing the currency to drift down to about 14.65 at a special dollar auction.