It is expected that the annual urban consumer price inflation rate will rise to 33.6%.
Egypt’s economy
In light of the continued shortage of foreign currency, more than a year after the devaluation of the pound
A Reuters poll conducted, Thursday, showed that the inflation rate in Egyptian cities is heading towards its highest level ever in March, in light of the continued shortage of foreign currency, more than a year after the devaluation of the pound.
The median forecast of 13 analysts polled by Reuters showed that annual urban consumer price inflation would rise to 33.6 percent in March from 31.9 percent in February. February’s rate was the highest in five and a half years.
Egypt, which received a $3 billion financial support package from the International Monetary Fund in December, has halved the value of its currency since March 2022, after the repercussions of the Russian invasion of Ukraine revealed weaknesses in the Egyptian economy.
“We believe that the previous reductions in the pound’s price will continue to raise the inflation rate in Egypt, and will raise inflation in food and non-food prices,” said Capital Economics, which expected inflation to reach 37.1% in March.
Inflation hit a previous record high of 32.952% in July 2017, eight months after Egypt halved the price of its currency as part of a previous $12 billion support package from the International Monetary Fund.
HC Securities and Investment said it expected that the March rate would reflect increases of 11% in gasoline prices and 20% in fuel oil prices (diesel) in early March.
The company added that the increase in domestic electricity prices last July and the recent liberalization of the prices of basic food commodities such as rice, in addition to the shortage of local poultry, would raise inflation figures.
Six of the analysts also on average expected the core inflation rate, which excludes fuel and some volatile foodstuffs, to rise to a record 42.25%, from 40.26% in February, which was also a record.
The central bank raised overnight interest rates by 200 basis points on March 30, bringing the deposit rate to 18.25%, in order to help curb inflation. This brings the total rate hike to 1,000 basis points since March 2022.
The Central Agency for Public Mobilization and Statistics is scheduled to release inflation data for February next Monday morning.
