A man carries subsidized sugar after buying it from a government truck during a sugar shortage in retail stores across the country in Cairo, Egypt, October 14, 2016. REUTERS/Amr Abdallah Dalsh
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Core inflation is at seven-year-highs, near 14 percent, as a foreign exchange shortage and a hike in customs duties bite hard in a country that imports everything from sugar to luxury cars.The government raised electricity prices by 25-40 percent in August and is phasing in a 13 percent value-added tax approved by parliament in the same month.As part of reforms aimed at clinching a $12 billion IMF loan needed to plug its gaping budget deficit, the government is also expected to cut petrol subsidies and devalue the Egyptian pound, prompting a further cycle of inflation in Egypt, where tens of millions rely on state-subsidised bread.In 2013 Egyptians again filled the streets to protest against Mohammad Morsi, the Muslim Brotherhood official who was democratically elected after the uprising but presided over a year of power cuts, petrol shortages and economic turmoil.Egypt's economy is likely to grow 3.5 percent in the 2016/17 fiscal year, a Reuters poll showed Thursday, missing the government's target of about 5 percent and dipping below last year's growth rate.The government said this week it had secured 60 percent of the bilateral funds, boosting foreign reserves to $19.6 billion in September.
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