Egypt Inflation Forecast: Decline Continues Amid Price Hikes
In August, Egypt's inflation is expected to decrease for the sixth consecutive month, driven by a favorable base effect. However, analysts suggest that there may be a month-on-month increase due to recent government-led price hikes.
The country's $8 billion financial support package with the IMF has helped Egypt manage inflationary monetary policy, but it has also led to higher domestic prices. The government has raised prices on many subsidized products to address a budget deficit that reached 505 billion Egyptian pounds in the last fiscal year.
Analysts predict that annual urban consumer inflation will slow to 25.1% in August from 25.7% in July. Factors contributing to the potential increase in inflation include energy and transportation cost hikes, higher summer produce prices, and increases in fuel, metro tickets, and electricity tariffs.
Core inflation, which excludes volatile items like fuel and certain foods, is expected to decline to 23.9% in August from 24.4% in July. The state statistics agency CAPMAS is set to release the official inflation data for August on Tuesday.
Overall, despite the downward trend in inflation, the impact of government price hikes on everyday expenses is likely to be felt by consumers. Understanding these trends can help individuals make informed decisions about their finances and budget accordingly to mitigate the effects of rising prices.