Egypt’s annual headline inflation declines to its lowest since October reaching 5.4 percent in December, down from the 5.7 percent in November, the Central Agency for Public Mobilization and Statistics (CAPMAS) announced on Sunday.
CAPMAS attributed the decrease to the reduction of record consumer prices in December by 0.5 percent in comparison to November.
In November, CAPMAS announced that the annual headline inflation rate rose to 6.3 percent in November 2020, up from 2.7 percent in November 2019.
Vegetable prices have dropped by 10.1 percent; seafood by 0.6 percent; meat and poultry by 0.2 percent; milk, cheese and eggs by 0.1 percent and ready-made garments fell by 0.6 percent.
On the other hand, a number of other products’ prices saw a rise in December, including fruits by 3.8 percent; oil and fats by 0.5 percent; grains and bread by 0.2 percent and transport services by 0.7 percent, according to CAPMAS.
Meanwhile, monthly inflation in urban areas witnessed a slowdown by 0.4 percent, reaching its lowest level in 18 months, after having expanded by 0.8 percent in November, according to CAPMAS.
Egypt’s monthly inflation rate increased by 1.1 percent in November to reach 2.9 percent, up from the 1.8 percent in October, according to CAPMAS.
Following their last meeting in 2020, to review the key interest rates, Central Bank of Egypt (CBE) announced in December that it had reset its inflation target to be at 7 percent (±2 percentage points) on average during the fourth quarter of 2022, down from 9 percent (±3 percentage points) on average that was targeted for the same quarter, explaining that this action came as the CBE continues to support macroeconomic stability.
According to CBE, Egypt’s real GDP growth increased to 0.7 percent during the third quarter of 2020, up from -1.7 percent during the second quarter of 2020, while growth registered a preliminary figure of 3.6 percent in FY 2019/2020 compared to the 5.6 percent a year earlier.
Furthermore, unemployment rate was recorded 7.3 percent in the third quarter of 2020, the lowest rate on record, down from 9.6 percent in the second quarter of 2020, according to CAPMAS.
In its first review of the stand-by agreement loan that was completed on Friday, the International Monetary Fund expected Egypt’s inflation rate to range between 6.3 percent and 9 percent during FY2020/2021 and to stand at 7.5 percent through FY2023/2024.
It also projected Egypt’s public debt to GDP ratio to hit 93 percent in the current FY2020/2021 before falling below 75 percent in FY2025/26.