Egypt announces $2.49bn package to cope with inflation

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Cairo - Egypt has announced a $2.49bn package of income tax discounts, bonuses for state employees, increased pension payments and cash subsidies for lower and middle income Egyptians to cope with soaring inflation.

The Cabinet said in a statement on Monday the package will go into effect on July 1.

The measures are partially designed to defuse discontent over steep prices hikes for food, medicine and services resulting from reforms introduced in November, including floatation of the Egyptian pound, the introduction of value added tax and partial lifting of subsidies on fuel.

The reforms, part of a deal to secure a $12bn loan from the International Monetary Fund, sent inflation soaring to more than 30%.

More of the subsidies on fuel and electricity are scheduled to be lifted this summer.

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