A recent poll conducted by Reuters suggests that Egypt’s inflation is anticipated to climb in March, driven by a series of economic adjustments, including currency devaluation, interest rate hikes, and fuel price increases earlier in the month.
The poll, involving 12 analysts, projects a 0.6 percent increase in annual urban consumer inflation to reach 36.3 percent. This forecast comes after a period of declining inflation since September’s peak of 38.0 percent, which unexpectedly surged again in February.
These economic adjustments are part of Egypt’s agreement with the International Monetary Fund (IMF). Last month, Egypt secured an expanded $8 billion financial support package from the IMF, following years of foreign currency shortages. The central bank’s decision to allow the Egyptian pound to trade freely led to a significant devaluation, with the currency dropping to about 49.5 to the dollar from 30.85 pounds. Additionally, the bank raised overnight interest rates by 600 basis points to stabilize the economy.
The forthcoming March inflation data, to be released by the state statistics agency, CAPMAS, on Monday, will provide a clearer picture of the economic situation in Egypt.
Egypt’s economy has faced numerous challenges, including government austerity measures, the impact of the Covid-19 pandemic, repercussions from the war in Ukraine, and, more recently, the conflict in Gaza. These factors continue to shape the economic landscape of the country, influencing inflation and consumer prices.
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