Inflation expected to slow in Egypt for fifth month in row despite higher prices
(MENAFN) Egypt's inflation rate is anticipated to ease for the fifth consecutive month in July, according to a poll, despite increases in food, tobacco, and fuel prices. This anticipated slowdown comes as the International Monetary Fund's (IMF) monetary policy measures start to take effect following Egypt's USD8 billion financial support package signed in March. The IMF-backed reforms are aimed at stabilizing Egypt's Economy and addressing its significant budget deficit, which stood at 505 billion pounds (USD10.27 billion) against a total budget expenditure of 3.016 trillion pounds by the end of the fiscal year on June 30.
In response to the economic challenges, the Egyptian government has implemented several price hikes on subsidized goods and services. Notably, the price of subsidized bread was increased by 300 percent on June 1, and vehicle fuel prices were raised by up to 15 percent on July 25. Despite these changes, analysts attribute the expected decline in inflation primarily to the base year effect. Aya Zuhair from Zilla Holding pointed out that last year's inflation rate in July was 36.5 percent, making the current figures appear lower in comparison. Eighteen analysts forecast Egypt's urban inflation to moderate to an average of 26.6 percent year-on-year in July, down from 27.5 percent in June.
Carla Slim of Standard Chartered noted that while the inflation rate is expected to slow overall, the impact of energy subsidy reforms will cause monthly inflation fluctuations. As Egypt continues to adjust fuel prices gradually with the goal of achieving economic balance by the end of 2025, these reforms are likely to exert upward pressure on monthly inflation rates even as the annual rate moderates.
MENAFN08082024000045015682ID1108532081
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.