In February, Egypt’s inflation rate fell to 12.5%, a decrease from January’s 23.2%, largely due to base effects. Monthly inflation dipped slightly to 1.4%. The economy is recovering after a major crisis, assisted by over $50 billion from international loans and investment. The IMF is expected to approve further financial support.
Egypt’s annual consumer inflation rate has decreased to 12.5% in February, marking a recovery from its most severe economic crisis. This decline from January’s rate of 23.2% is attributed to a base effect, according to analysts. Inflation reached a staggering 36% previously, making current figures appear lower when compared to last year’s extreme price surges.
In February, the monthly consumer inflation rate recorded at 1.4% showed a slight decline from January’s 1.6%, as reported by the Central Agency for Public Mobilisation and Statistics. Egypt’s economy, heavily reliant on imports, faced significant pressure from a parallel market crisis due to a shortage of foreign currency, leading to daily price hikes for consumer goods.
Recovery appears underway, following a significant currency devaluation in March 2024, aided by over $50 billion in loans and investments from the World Bank, UAE, and the IMF. Since February 2022, the Egyptian pound has depreciated over 60%, with inflation peaking at approximately 40% in August 2023.
Under an IMF-funded reform plan, authorities have initiated several changes, including three fuel price hikes last year. The ongoing IMF program, initially set at $3 billion, has been increased to $8 billion. The IMF board is anticipated to approve a $1.2 billion tranche during its upcoming review of the program.
Analysts suggest that a new loan agreement from the IMF, disclosed last month, may exceed $1 billion, reflecting ongoing financial support and development for Egypt amidst economic challenges.
Egypt’s inflation rate shows a marked decline as it recovers from a severe economic crisis, attributed largely to a base effect from previous highs. Monthly inflation is also easing, with various reforms supported by international loans. Despite challenges, the IMF’s continuous support signals a pathway to stabilization for the Egyptian economy, represented by agreements and currency adjustments.
Original Source: newscentral.africa
