(MENAFN) The annual inflation rate in consumer prices across Egyptian cities showed a notable deceleration in April, dropping to 32.5 percent from 33.3 percent in March, as reported by the Central Agency for Public Mobilization and Statistics in Egypt. This figure, although still high, indicates a slight easing of inflationary pressures compared to the previous month. On a monthly basis, prices experienced a modest uptick of 1.1 percent in April, slightly higher than the 1 percent increase recorded in March.
Interestingly, food prices exhibited a different trend in April, declining by 0.9 percent on a monthly basis, yet maintaining a substantial year-on-year increase of 40.5 percent. This divergence highlights the complex dynamics at play within the Egyptian economy, particularly regarding the volatility of food prices and their significant impact on overall inflation.
Analysts, surveyed prior to the data release, had anticipated a slightly higher decline in the annual inflation rate, forecasting an average of 32.8 percent. This projection aligns with the ongoing downward trajectory observed since September, when inflation reached a peak of 38 percent, underscoring efforts to stabilize prices and restore economic equilibrium.
The Central Bank of Egypt responded to inflationary pressures by implementing a series of monetary policy measures, most notably raising interest rates by 600 basis points on March 6. This decision coincided with the signing of an $8 billion financial support package with the International Monetary Fund (IMF), signaling a commitment to addressing economic challenges head-on. Additionally, the central bank allowed the value of the Egyptian pound to adjust, reflecting a strategy aimed at bolstering competitiveness and mitigating inflationary pressures.
Under the terms of the March agreement with the IMF, Egypt pledged to implement further monetary tightening measures if deemed necessary to safeguard the purchasing power of households and prevent further erosion. This commitment underscores the government's dedication to fostering economic stability and promoting sustainable growth amidst ongoing challenges.
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