Egypt’s inflation rate decreased to 12.5% in February from 23.2% in January due to a base effect. Monthly inflation was 1.4%, slightly less than January’s figure. The economy is recovering thanks to over $50 billion in financial support from international lenders and crucial reforms implemented under the IMF agreement.
In February, Egypt’s annual consumer inflation rate decreased significantly to 12.5%, indicating a recovery from its worst economic crisis. This decline from 23.2% in January is attributed to a base effect, according to analysts. Wael el-Nahas, an economist, noted that comparisons to the previous year’s peak inflation of 36% make the current rate appear lower.
The monthly inflation rate in February was recorded at 1.4%, slightly down from January’s rate of 1.6%, as stated by the Central Agency for Public Mobilisation and Statistics. The Egyptian economy, heavily reliant on imports, faced a severe crisis early last year due to a lack of foreign currency, leading to rising prices of consumer goods.
Recent developments, including a currency devaluation in March 2024 and over $50 billion in financial support from the World Bank, the UAE, and the IMF, have contributed to Egypt’s economic recovery. Despite the Egyptian pound losing over 60% of its value since February 2022 and inflation peaking at 40% in August 2023, authorities have implemented critical reforms.
These reforms include multiple fuel price hikes as part of an IMF agreement, which has risen from $3 billion to $8 billion. The IMF board is anticipated to approve a $1.2 billion tranche at the upcoming review of the program, and analysts predict that a new loan agreement could exceed $1 billion.
In summary, Egypt’s inflation rate has shown significant improvement, dropping to 12.5% in February from 23.2% in January, mainly due to a base effect. The economy is recovering following financial assistance and necessary reforms after facing severe inflation and currency devaluation. The upcoming IMF approvals and potential new financing agreements further highlight the ongoing efforts to stabilize the economy.
Original Source: newscentral.africa
