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Egypt’s annual inflation rate hit a record high of 36.8% in June, according to official figures announced recently. The country is in the midst of an economic crisis.
Egypt’s annual inflation rate hit a record high of 36.8% in June, according to official figures announced recently. The country is in the midst of an economic crisis.
The previous record inflation rate of 34.2%, in July 2017, followed a sharp devaluation of the country’s currency linked to a bailout loan from the International Monetary Fund (IMF). This year’s record similarly comes after a bailout loan from the IMF last year. The Egyptian pound has lost half its value in a year which has made conditions even more difficult for households as prices rise.
Russia’s war in Ukraine heavily impacted Egypt which is one of the world’s largest grain importers. The invasion last year sent wheat prices skyrocketing and destabilized international markets. In Egypt, investors withdrew billions in foreign currency, causing the country’s dollar reserves to plummet to 20%.
Reserves have risen since to US$34.8 billion in March, including US$28 billion in deposits from the country’s wealthy Gulf allies, up US$500 million since February. But they would need to increase by US $7 billion to reach pre-war levels.
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Egypt is one of the five countries in the world most at risk of defaulting on its external debt, according to rating agency Moody’s. It has had to rely on bailouts from Gulf countries and the IMF in recent years. The IMF approved a loan of US$3 billion to Egypt, whose external debt has more than tripled in ten years, attaining a record of US$165.4 billion this year, according to figures provided by the Ministry of Planning.
As the United Nations prepares to mark World Population Day (July 11) , the demography of nations around the globe is dramatically changing. Growing populations in India and Africa are leading to greater development but they both also face the brunt of climate change.
