Inflation in Egypt continues to accelerate
2023.01.10 03:05
Inflation in Egypt continues to accelerate
By Ray Johnson
Budrigannews.com – According to data released on Tuesday by the statistics agency CAPMAS, annual urban consumer inflation in Egypt exceeded analyst expectations in December, rising to 21.3% from 18.7% in November.
The rate of inflation reached a record high of 21.9 percent in December 2017. The devaluation of the currency in October and import restrictions prompted the price increases.
In a survey of 15 economists conducted by Reuters, the median forecast predicted inflation of 20.50 percent. In addition, five economists predicted that core inflation, which is due later on Tuesday, would average 23.6%, up from 21.5% in November.
On October 27, the Egyptian pound depreciated by approximately 14.5%, and in November and December, its value continued to decline gradually.
According to Allen Sandeep of Naeem Brokerage, “Food and beverages were up 4.6% month-over-month (adding to the 4.5 percent in November), primarily impacted by bread and cereals, dairy, vegetables, and meat.”
Sandeep asserted that although this serves as a prelude to further inflation, it helps to cushion a 25% devaluation at the end of October.
“Over the past three months, combined monthly inflation has increased by approximately 7%. This contributes nearly 30% to the urban CPI index. We can anticipate the annual CPI to reach 25% by February due to the ongoing new round of devaluation, which we anticipate will be around 15%.
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When the Monetary Policy Committee of the central bank meets again on February 2, pressure to raise interest rates will increase due to Egypt’s rising prices.
