- A Reuters poll expected inflation in Egypt to slow for the second month in a row in April, continuing the downward trend it has maintained for most months since last September.
- In March, Egypt implemented austerity measures linked to an $8 billion financial support package that it agreed with the International Monetary Fund at a time when it was seeking to control its financial resources.
- The measures included increasing fuel prices, raising the interest rate, and allowing the value of the pound to depreciate after nearly two years of continuous foreign currency shortages, and officials say that policy priorities focus on reducing the inflation rate.
- The Central Agency for Public Mobilization and Statistics and the Central Bank of Egypt usually reveal inflation numbers on the tenth day of every month, which falls on next Friday, an official holiday, and therefore it is highly expected that these numbers will be revealed tomorrow, Thursday.
- According to the average forecast of 17 analysts, annual inflation in Egyptian cities is likely to slow to 32.8% in April from 33.3% in March.
- Inflation continued to slow from an unprecedented peak of 38% in September, but unexpectedly accelerated again in February.
- “We expect the CPI for April to decline to 32.1% on an annual basis, from 33.%, and expect the slowing trend in Egypt to continue, with annual inflation falling to 25% by the end of the 2023-2024 fiscal year in June 2024,” Standard Chartered’s Carla Slim wrote. .
- The Central Bank allowed the value of the Egyptian pound to fall to about 49.5 against the dollar on March 6 from the level of 30.85, which it had kept unchanged in the previous twelve months. The central bank also raised the overnight deposit and lending rates by 600 basis points.
- Not all analysts participating in the survey expected inflation to slow.
- “The effective exchange rate of the pound fell 3% month-on-month to the dollar in April, and with fuel prices rising by around nine to 21%, it is likely that core inflation rose to 34% year-on-year in April,” said James Swanston of Capital Economics.
- Egypt raised the prices of a wide range of fuel products on March 22, as part of a commitment it made to the IMF more than a year ago to allow most domestic prices to rise to international levels.
- According to the average forecast of nine analysts surveyed, core inflation, which excludes fuel and some volatile food items, is expected to rise to 32.7% in April from 33.7% in March.
