Posted on: Tuesday, June 28, 2022 – 7:50 PM | Last update: Tuesday, June 28, 2022 – 7:50 PM
Anyone who visited Europe before the emergence of the Corona virus and the outbreak of the Russian-Ukrainian war, will immediately discover that the prices of many goods and services have risen.
The aim of this article is not an attempt to link and justify the rise in prices in Egypt, but rather an attempt to monitor so that we realize what is happening in the world due to the repercussions of Corona and the Ukrainian war.
To be logical, there is a basic difference between the rise in commodity prices in Europe and their rise in Egypt and their counterparts in other countries.
This difference is the level of the economy here and there, and the extent of its ability to absorb and withstand shocks and crises. To be more clear, the German economy is classified as the third largest global economy in terms of gross national product, with regarding $3.8 trillion, behind America and China. A population of more than 1.4 billion people, and the United States exports regarding 1.6 trillion with a population of less than 350 million. According to this criterion, the German economy is the most efficient in the world, if we compare the volume of exports to the population.
According to official data, inflation has finally reached a record level since 1990 and perhaps 1981, and consumer prices rose by 4.7% last April compared to the same month last year. Experts expect that the inflation rate for the whole of this year will exceed 6% in the largest European economy since the unification of the two parts of the country in 1991.
When the Egyptian pound was liberated once morest foreign currencies on November 3, 2016, the Egyptian who traveled to Europe was dealing with the fact that the euro was worth less than nine Egyptian pounds. The rise in global prices in general, due to the repercussions of Corona and Ukraine, and the rise in fuel prices, exacerbated the crisis.
What worries Germany since the entry of Russian forces into Ukraine on February 24 is gas because Russia supplies Germany with more than 46% of its gas needs, and the German state announced that it is regarding to stop relying on Russian gas before the end of this year. But this may lead to a growing stagnation in the industrial sector.
Germany appeals to its citizens to reduce the operation of heating facilities, and said that each reduction in the operation of heating facilities by a certain percentage will save billions of euros that are paid to import gas, whether from Russia or others.
The increase in inflation is mainly related to the increase in energy prices. When I rode with an Egyptian friend residing in Berlin last week, he told me that the price of a liter of gasoline had become regarding 2 euros, or 40 Egyptian pounds, and it is a pivotal commodity because it leads to an increase in the prices of many commodities, and housing prices have increased by regarding 25 % as well as insurance rates on everything.
As I learned from many Egyptian residents – whom I met there last week while attending the celebration of the tenth anniversary of the opening of the Berlin branch of the German University in Cairo – prices increased by 5-30%, compared to the last time I visited Germany, which was regarding 4 years ago. According to an economic study, commodity prices are up 16.6% compared to last year, and as economist Veronica Grimm said in a DPA survey: “The risk of a wage and price spiral has increased dramatically and Germans will have to adapt to higher prices in the long run.
Some may say that the aim behind these words is to justify the high prices in Egypt, and simply reply that there is a fundamental difference, which is that the German economy is very strong and the German state can absorb many shocks and has enough and increases resources not only to help its citizens, but to help many European countries, and even Ukraine itself.
But the problem lies in countries that suffer from structural problems in their economies, such as Egypt and others.
We depend on the outside and import many basic commodities, and we have few resources. Our biggest problem is that our exports are few and our technical education is very weak, and therefore we will suffer a lot, but we must remember that the whole world was almost affected by the crisis, but to different degrees. Therefore, the lesson is how to take advantage of what is happening abroad in order to reduce the damage.
