In late January the government announced that it was implementing various economic support measures to help the hard-pressed population. The first measure was to increase the number of families eligible for cash subsidies under the Social Welfare Fund by 500,000, raising the number of dependent families by half. The government also created a fund to support out-of-work university graduates and waived university tuition fees for existing students for the next academic year.

Public-sector employees were also given support: the military and security forces were given pay rises and offered other benefits, such as free basic foodstuffs, and bureaucrats were given a 30% pay rise. Public-sector workers also benefited from a reduction in income tax, which was halved. In addition, the income tax threshold was raised more than threefold. The various measures clearly came as a response to rising popular antipathy towards the government and the president. The measures are wide-ranging and cover almost all groups within society. Specific measures directed at the army, the poor and students are a good indication of where the government believes the greatest fault lines within society lie.

The obvious concern that these measures raise is how the government is going to pay for them. The state budget projected a 9.5% reduction in expenditure this year, but it is now highly likely that the government will have to issue a supplementary budget in due course. This may provoke the ire of the IMF, which in mid-2010 signed a US$369.8m extended credit facility with the government, designed to support public finances and bring the fiscal deficit to below 3.5% of GDP within three years. Instead of shrinking as anticipated, however, the deficit could now widen, putting untold strain on the government finances.

The government's situation should at least be assisted by the improved fiscal performance in 2010, when the Economist Intelligence Unit estimates that the deficit halved. In addition, oil prices have increased sharply in the wake of the wave of protests that have swept the region. Oil earnings constitute some 60% of total government revenue, and the rising oil price will thus boost state earnings. However, the fiscal situation could be further assisted by reducing fuel subsidies, spending on which will simultaneously rise in line with higher oil prices. The helpful effect on the state finances of higher local fuel prices is evident in recent official data showing that the three subsidy reductions in 2010 contributed to a 4.8% decline in domestic consumption of the country's oil production (thus leaving more available for export).