Egypt’s inflation rate fell to 12.8% in February from 24.0% in January, exceeding analysts’ expectations. Monthly prices rose 1.4%. Economic reforms, including currency devaluation and an IMF agreement, contributed to this decline. Previous inflation peaked at 38.0% in September 2023.
Egypt’s annual urban consumer price inflation dramatically decreased to 12.8% in February, a significant drop from 24.0% in January, surpassing analysts’ expectations, according to the Central Agency for Public Mobilization and Statistics (CAPMAS). This decline is attributed to the waning effects of exceptionally high price increases over the past two years. A recent Reuters poll predicted a median inflation rate of 14.5%.
Monthly inflation recorded a 1.4% increase in February compared to January. Food and beverage prices experienced annual growth of 3.7%, with a modest rise of 0.2% from the previous month. Inflation has been on the rise since early 2022, largely influenced by the aftermath of the Russian invasion of Ukraine, which led to considerable capital flight from Egyptian treasury markets.
The inflation rate reached a historical peak of 38.0% in September 2023, largely driven by rapid growth in the money supply. The M2 money supply increased at a record rate of 32.1% over the year leading to January, as per central bank data.
Last year, Egypt undertook significant economic reforms including a currency devaluation, a 600 basis point increase in interest rates, and an $8 billion support agreement with the International Monetary Fund (IMF), all aimed at stabilizing its financial situation.
In summary, Egypt’s inflation rate saw a steep decline to 12.8% in February due to the diminishing impacts of past high inflation rates. Monthly prices rose by 1.4%, with food and beverage costs contributing to inflationary pressures. Recent economic adjustments, including currency devaluation and an agreement with the IMF, have played a crucial role in these developments. This trend marks a crucial moment in Egypt’s ongoing economic recovery.
Original Source: www.zawya.com
