An Estimate of the Impact of Bread and Energy Carriers Price Correction on Household Expenditure

Bread is an important source of calorie intake for urban and rural households. The government allocates very high subsidies for bread consumption annually. This has kept low the share of bread expenditures in household basket. On the other hand, the continuation of this trend is not possible, due to the budget limitation of government, and the inefficiency of bread production, distribution and consumption system. The government has placed the reform of subsidy system on its agenda. The important pointis the measurement of subsidy elimination impact on household expenditure, which constitutes the subjext matter of this article. The methodology of this research is Social Accounts Matrix (SAM).So, its main results show that the elimination of bread and energy carriers subsidies will lead to a 33 percent increase in urban household expenditure and 40 percent in rural household expenditure.