In a much-needed relief for the economy, Egypt’s annual urban consumer price inflation rate dropped to 25.7% in July from 27.5% in June, Reuters reports.
This deceleration was quicker than anticipated by analysts, marking a positive turn in the country’s ongoing battle with inflation.
According to data released by the Central Agency for Public Mobilization and Statistics (CAPMAS), the decline in prices was driven by a 0.4% decrease in July, a significant improvement from the 1.6% recorded in June.
One of the key contributing factors to this drop was the decrease in food prices by 0.3% in July. Despite this decline, food prices remained substantially higher compared to the previous year, recording a 28.5% increase.
This reduction in inflation comes as a welcome development for Egyptian consumers who have been grappling with soaring prices for essential goods and services.
Analysts had predicted a median inflation rate of 26.6% for July, making the actual figures a positive surprise.
This downward trend in inflation has been ongoing since September, when inflation had peaked at a staggering 38.0%.
The government’s concerted efforts to address inflation and stabilize the economy seem to be bearing fruit, albeit gradually.
Egypt’s monetary policy underwent significant tightening measures as part of the conditions under an IMF financial support package worth $8 billion signed in March.
These measures included a series of interest rate hikes by the central bank, totaling 800 basis points by March 6, 2024.
While these decisions were aimed at curbing inflation and restoring economic stability, they also had consequences for domestic prices and the value of the Egyptian pound.
The government also implemented various reforms to offset the budget deficit, which reached 505 billion Egyptian pounds ($10.27 billion) in the financial year ending on June 30.
Measures such as raising the prices of subsidised products, including bread and fuel, were part of the strategy to address the fiscal shortfall and reduce dependence on subsidies.
The significant progress in slowing down inflation indicates a positive trajectory for Egypt’s economy.
As the country continues to implement reforms and adhere to the IMF support programme, the hope is that inflation will stabilize further, providing relief to Egyptian citizens and fostering a more conducive environment for economic growth.
In conclusion, Egypt’s inflation rate slowing to 25.7% in July is a promising development that reflects the positive impact of the government’s economic reforms and policy measures.
While challenges remain, this downward trend signals a step in the right direction towards economic stability and resilience in the face of ongoing global uncertainties.
Go to Who Owns Africa for more news from the African continent.
Follow Who Owns Africa on Twitter @Who Owns Africa, on Facebook at Who Owns Africa or on Instagram at whoownsafrica
Discover more from Who Owns Africa
Subscribe to get the latest posts sent to your email.
