Egypt’s annual urban consumer price inflation declined to 28.1 percent in May from 32.5 percent in April, data from the Central Agency for Public Mobilization and Statistics (CAPMAS) revealed on Monday. This marks the country’s third consecutive month of decline since inflation’s surprise increase in February.
Month-on-month, prices saw a 0.7 percent decline in May while food prices saw a 3 percent decline. The report also reveals a decline in Egypt’s rural inflation to 26.7 percent driven by a decline in food and beverage prices and restaurant and hotel prices. Meanwhile, the country’s overall inflation declined to 27.4 percent.
The latest S&P Global Purchasing Managers’ Index (PMI) report reveals that Egypt’s input cost inflation slowed to a 38-month low in May, supporting the country’s non-oil private sector as cooling inflationary pressures spurred a near-stabilization in demand conditions. The report cited lower exchange rates and a rise in currency availability as supporting factors for the decline in Egypt’s purchase price inflation, which declined to its lowest level in four years.
Economy to grow by 2.9 to 3 percent this year
Earlier this month, Dr. Hala Elsaid, Egypt’s Minister of Planning and Economic Development, predicted that the country’s economy will grow by 2.9 percent to 3 percent in the financial year ending June 2024, before accelerating to 4.2 percent in the 2024-25 fiscal year.Â
Egypt has been struggling with an extreme shortage of foreign currency and surging inflation rates. However, conditions have improved since the $24 billion real estate deal with the United Arab Emirates (UAE) in late February, as well as a significant devaluation of the Egyptian pound and the signing of an $8 billion agreement with the International Monetary Fund (IMF) in early March. Last week, Egypt also reached a staff-level agreement with the IMF for an $820 million loan to further support the country’s economic recovery.
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