BNP Paribas Middle East and North Africa economic expert, Mohamed Abdel-Meguid, predicted, in an interview with Al-Arabiya, that rates of inflation in Egypt with a peak in the first quarter of 2023, at levels of 25-26% yoy.
Abdel Magid said the jump in inflation rates will prompt the Central Bank of Egypt to raise interest rates by around 100-200 basis points during the Monetary Policy Committee meeting in February and March.
He added that the weakness of the Egyptian pound has led to a deterioration in the inflation rate, as the prices of products and commodities have seen price jumps due to the parallel market of the currency, on the basis of which traders value commodities and products , and that the dollar is trading above £30.
He explained that the foreign exchange market in Egypt has seen a gradual shift since the middle of last week, towards a floating, ‘managed floating’ exchange rate instead of ‘managed fixing’.
“We expect the Egyptian pound to continue falling. We don’t expect the pound to stabilize in the twenty levels, it will most likely go above the 30 level and could stabilize in the mid-30s,” according to Mohamed Abdel-Meguid.
Regarding the issuance of savings bonds with a high interest rate of 25%, Abdel-Meguid said it was a “necessary” but “temporary” step… explaining: “Egypt in the last 20 years cannot satisfy 3 factors simultaneously (fixing the exchange rate and controlling the exchange rate), the interest rate and the freedom of capital inflow and outflow), and every time these factors come together, sooner or later they damage the economy of Egypt.
Egypt’s Central Agency for Public Mobilization and Statistics has announced inflation rates for December 2022, as the annual inflation rate for the entire republic was 21.9%, up from 19.2%. % in November and about 6.5% in the same month of the previous year.
The general consumer price index for the entire Republic reached 143.6 points for December 2022, an increase of 2.1%, compared to November 2022.
The most important reasons for this increase are due to price increases in the fruit group by 7.6%, in the dairy, cheese and egg group by 6.4%, in the cereal and bread group by 5.0%, in the fish group and seafood by 3.1%, the meat and poultry group by 2.8%, and the sugar and sugary foods group by 2.5%.
