Sisi Tells Egyptians to Bear with Economic Pain, Says Mega-Projects Provide Jobs

 An Egyptian man drives his motorbike in front of posters of Egypt's President Abdel Fattah al-Sisi that reads, "Our goal is to build modern Egypt", in Cairo, Egypt January 24, 2024. (Reuters)
An Egyptian man drives his motorbike in front of posters of Egypt's President Abdel Fattah al-Sisi that reads, "Our goal is to build modern Egypt", in Cairo, Egypt January 24, 2024. (Reuters)
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Sisi Tells Egyptians to Bear with Economic Pain, Says Mega-Projects Provide Jobs

 An Egyptian man drives his motorbike in front of posters of Egypt's President Abdel Fattah al-Sisi that reads, "Our goal is to build modern Egypt", in Cairo, Egypt January 24, 2024. (Reuters)
An Egyptian man drives his motorbike in front of posters of Egypt's President Abdel Fattah al-Sisi that reads, "Our goal is to build modern Egypt", in Cairo, Egypt January 24, 2024. (Reuters)

President Abdel Fattah al-Sisi told Egyptians on Wednesday they were still able to eat and drink despite soaring prices as he defended mega-projects he said provided millions of jobs.

Egypt's long-running foreign currency shortage risks deepening because of lost revenues from the Suez Canal, and this month has triggered store closures and new restrictions on credit card withdrawals.

Inflation has eased slightly from record highs last year but is still running at over 30%.

Sisi blamed the lack of foreign currency on Egypt's decades-old import dependency, which he said required spending of $1 billion a month on staples like wheat and vegetable oils and another $1 billion on fuel.

"We present services to the Egyptian people in Egyptian pounds, and have to pay for them in dollars," he said in comments to mark national police day in Cairo.

"Don't we eat? We eat. Won't we drink? We drink, and everything is functioning. Things are expensive and some things are not available? So what?" Sisi said.

"They tell me that life is expensive, I tell you that even if it's expensive, we are living. If we can bear with it, we will live, we will grow, and we will overcome this problem."

Egypt is trying to revive and expand a $3 billion program with the International Monetary Fund. But in order to do so is under pressure to let its currency float and carry out structural reforms that include reducing the role of the military and the state to make space for the private sector.

The government is faced by a steep repayment schedule on a debt burden that has surged in recent years as Egypt has embarked on costly mega-projects including a new capital city under construction east of Cairo.

"We were told by economists that we need deep austerity measures in our economy, and this is not a secret," said Sisi.

"And that we should halt grand projects, and this economic view may be sound, but to that I say: I employ 5-6 million people, tell me ... how could we shut all this down?"



Gold Extends Gains as Trump Tariffs Fuel Safe Haven Flows

Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo
Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo
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Gold Extends Gains as Trump Tariffs Fuel Safe Haven Flows

Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo
Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo

Gold prices rose for a second straight session on Tuesday, but traded below the recent all-time highs, as uncertainty around US President Donald Trump's tariff plans continued to fuel economic growth concerns and safe haven flows into bullion.

Spot gold gained 0.6% at $2,913.79 an ounce as of 0714 GMT. It hit a record high of $2,942.70 last week.

US gold futures added 0.9% to $2,925.50.

"Trump's disruptive modus operandi, aggressive rhetoric and tariffs - whether actual or threatened - could unravel global trade and intricate supply chains," said Nikos Tzabouras, senior financial writer at trading platform Tradu, Reuters reported.

"With uncertainty surrounding the global economy and the broader geopolitical landscape in the Trump 2.0 era, gold is set to remain a natural beneficiary of risk-off flows and central bank buying."

Since taking office last month, Trump has swiftly redrawn the global trade battlefield with a series of tariffs, while plans are already in motion for sweeping reciprocal tariffs, aimed squarely at any nation that taxes US products.

"Gold continues to benefit from the uncertainty surrounding the US. government's tariff policy. Central bank buying should also continue to provide support, even if there is no new data on this," Commerzbank analysts said in a note.

The market's focus has now shifted to the US Federal Reserve's January meeting minutes due on Wednesday for clues into the central bank's interest rate trajectory.

"Price gains are also supported by growing expectations that the Fed will cut rates in 2025 - a sentiment that gained further traction among traders after last week's disappointing US retail sales figures," Ricardo Evangelista, senior analyst at brokerage firm ActivTrades, said.

Bullion benefits from geopolitical and economic uncertainties, as well as rising price pressures, but higher interest rates diminish the asset's allure.

Spot silver fell 0.9% to $32.50 an ounce. Platinum jumped 0.9% to $985.20 and palladium climbed 1.6% to $978.00.