Egyptian inflation seen as having risen to 27% in October
2024.11.06 08:55
CAIRO (Reuters) – Inflation in Egypt is estimated to have climbed to 27.0% in October, pushed up by higher education costs and a fuel price increase in the middle of the month, according to a poll released on Wednesday.
The median forecast of 17 analysts was for annual urban consumer inflation to increase to 27% last month from 26.4% in September, which would mark the third straight month of increases in annual inflation.
The data was collected from Oct. 31 to Nov. 6.
“The rise in October will be primarily driven by a likely revision in education costs, typically accounted in October,” Sri Virinchi Kadiyala of ADCB said.
In March, Egypt signed an $8 billion financial support package with the International Monetary Fund that is designed to help it adopt a less inflationary monetary policy but that requires it to increase many domestic prices.
Egypt’s M2 money supply expanded in September by an apparent all-time high of 29.59% year-on-year, central bank data showed, helping to fuel inflation.
Annual inflation was given a boost by fuel hikes of 10-15% near the end of July and another 11-17% increase in mid-October, a 25-33% jump in metro tickets at the beginning of August and a 21-31% rise in electricity tariffs in August and September.
Inflation has trended gradually lower from a record high of 38.0% in September 2023. The central bank’s lending rate, at 28.25%, turned positive in July for the first time since January 2022.
“We do still expect for inflation to slow over the remainder of Q4 and more sharply in Q1 2025 to allow the central bank to start its monetary loosening cycle,” James Swanston of Capital Economics said.
(Polling by Veronica Khongwir and Rahul Trivedi; Writing by Patrick Werr; editing by Mark Heinrich)
