Food subsidies in Egypt: Macroeconomic and trade implications

The principal theme of this chapter is the implications of the Egyptian food subsidies for such macroeconomic measures as nonfarm output, the government's budget, inflation, the exchange rate, and the balance of payments. There is, however, an important secondary theme—namely, the extent to which the policies in the food sector are themselves molded by the macroeconomic setting. For example, it is hard to imagine that the level of Egypt's food subsidies is unrelated to the country's capacity to import. So while exploring the implications of the food subsidy scheme, these reverse linkages will also be examined.