(3 Minutes Read)
- Inflation in Egypt is forecast to have increased in March as prices in the country adjust to a currency devaluation and an interest rate hike early in the month, followed by a fuel price increase
Inflation in Egypt is forecast to have increased in March as prices in the country adjust to a currency devaluation and an interest rate hike early in the month, followed by a fuel price increase.
According to a poll organised by the news agency, the annual urban consumer inflation is expected to increase by 0.6 per cent to 36.3 per cent, based on a median forecast by 12 analysts. Inflation had been declining from September’s record high of 38.0 per cent but unexpectedly surged again in February.
The government’s austerity measures are part of its agreement with the International Monetary Fund (IMF). Last month, Egypt signed an expanded US$8 billion financial support package with the IMF after more than two years of chronic foreign currency shortage. The central bank said it would allow the Egyptian pound to trade freely, which saw the currency plummet to about 49.5 to the dollar from 30.85 pounds.
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The bank also raised its overnight interest rates by 600 basis points in a bid to stabilise the economy. The state statistics agency, CAPMAS, is due to release the March inflation data on Monday. Egypt’s economy has been hit hard by years of government austerity, the Covid-19 pandemic, fallout from the war in Ukraine, and more recently, the war in Gaza.
