Even when you consider that around 30% of Egyptians live in poverty, this development is worrying. A new wave of social upheaval in the Arab world’s most populous nation could potentially result from growing resentment at the huge price hikes, with profound political and security implications for the entire region.
At the same time, the country’s foreign exchange reserves have declined significantly, reaching $34 billion in December 2022, which the Bank of Egypt says is barely enough to pay for Egypt’s imports for 5.4 months. The Egyptian pound has been under pressure of late, prompting the government to authorize the country’s third devaluation in less than a year. On January 11, the official market reached the Egyptian pound at 32 against the dollar by midday, before recovering to 29.6 the next day.
Reuters shares a similar opinion. Economists had expected a figure of 23.75%, according to a news agency report, according to the median forecast in a Reuters poll of 14.
Five economists predicted that core inflation would rise to 26.6% from 24.4% in December. Later on Thursday, the central bank is expected to release January data.
Although soft drinks and groceries make up 32.7% of the index’s basket, headline inflation rose as manufacturers continued to pass higher import costs on to consumers, according to Naeem Brokerage’s Allen Sandeep.
Prices rose 4.7% month-on-month, up from 2.1% in December, which Sandeep said was due to a 10.1% monthly increase in food and beverage costs.
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