Egypt’s annual inflation rate dropped to 12.5% in February from 23.2% in January, influenced by a base effect. Monthly inflation was 1.4%, slightly lower than January’s rate. Economic recovery is ongoing, buoyed by substantial international loans amidst severe currency depreciation and reforms under an IMF agreement.
In February, Egypt recorded an annual consumer inflation rate of 12.5%, a marked reduction amidst ongoing recovery from its severe economic crisis. This decline from January’s rate of 23.2% is attributed in part to a base effect, as the country has been experiencing a gradual decrease in inflation for several months. Wael el-Nahas, an economist, noted that this lower figure arises from comparing current rates against last year’s significant price surges.
The monthly inflation rate for February was reported at 1.4%, slightly down from January’s 1.6%, according to the Central Agency for Public Mobilisation and Statistics. Egypt’s economy, which heavily relies on imports, faced challenges due to a severe shortage of foreign currency last year, resulting in daily price increases for consumer goods in urban areas.
The economic landscape appears to be improving following the currency devaluation in March 2024, supported by over $50 billion in loans and investment commitments from the World Bank, the United Arab Emirates, and the International Monetary Fund (IMF). Since February 2022, the Egyptian pound has depreciated over 60%, with inflation peaking at around 40% in August 2023.
In response to the economic situation, authorities initiated several reforms, including multiple fuel price hikes last year, as part of an IMF arrangement that was expanded from $3 billion to $8 billion. The IMF board is anticipated to approve a $1.2 billion fund during its upcoming program review, with analysts predicting that a new proposed loan agreement may exceed $1 billion.
Egypt’s inflation rate has significantly decreased to 12.5% in February from 23.2% in January, reflecting gradual economic recovery post-crisis. Factors influencing this change include comparative analysis with past inflation spikes and recent currency reforms. With continued support from international lending institutions, Egypt appears poised for further economic stabilization.
Original Source: newscentral.africa
