Egypt’s inflation decreased to 12.8% in February from 24.0% in January, exceeding analysts’ expectations due to base effects. Month-on-month prices rose by 1.4%, with food and beverage prices up by 3.7% annually. Rapid money supply growth has influenced inflation, which peaked at 38.0% in September 2023. Economic measures have aided in financial stability.
Egypt’s annual urban consumer price inflation has significantly decreased to 12.8% in February from 24.0% in January, surpassing analysts’ expectations according to data released by the statistics agency CAPMAS. Experts attribute this decline to the base effect, which indicates that the high price surges of the previous two years are no longer influencing current statistics. A survey of fifteen analysts conducted by Reuters indicated an anticipated reduction to a median inflation of 14.5%.
In terms of monthly changes, consumer prices increased by 1.4% in February compared to January, while food and beverage prices rose by 3.7% year-on-year, reflecting a modest increase of 0.2% from the previous month. Beginning in early 2022, inflation rates had been escalating due to external factors caused by the Russian invasion of Ukraine, which led to substantial withdrawals of investments from Egyptian treasury markets.
The peak of inflation was recorded at 38.0% in September 2023, driven partly by an unprecedented growth in the money supply, as reported by the central bank, which expanded by 32.1% year-on-year by the end of January. In an effort to stabilize its economy, Egypt devalued its currency last year, raised interest rates by 600 basis points, and secured an $8 billion financial support package from the International Monetary Fund, which has aided in restoring financial control.
In summary, Egypt’s inflation rate has shown a remarkable decline, with February’s annual urban consumer price inflation falling to 12.8%. The drop is attributed to the diminishing impact of previous high inflation rates, and recent economic measures have contributed to the stabilization of the economy. The situation continues to evolve as the inflation rate remains a critical factor in Egypt’s financial landscape.
Original Source: www.zawya.com
