File Photo: A woman wears a protective face mask inside a Carrefour hypermarket while Egypt ramps up its efforts to slow the spread the coronavirus disease (COVID-19) in Cairo, Egypt March 19, 2020. REUTERS
Egypt’s annual headline inflation rate jumped to 6.4 percent in August; double the rate recorded in the same month of 2020 at 3.6 percent and the highest since December 2020, the Central Agency for Public Mobilisation and Statistics (CAPMAS) announced on Thursday.
CAPMAS attributed this hike to the increase in the prices of furniture and maintenance services by 2.6 percent, healthcare services by 2.4 percent, education by 29.7 percent, restaurants and hotels by 1.9 percent, transport by 3.5 percent, food and beverages by 7.6 percent, and the rise in other commodities and services by 9.2 percent.
On the other hand, the monthly headline inflation rate marginally declined in August by 0.1 percent.
The Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) is set to convene — for the sixth time in 2021— on Thursday 16 September to review the key interest rates in light of the macroeconomic indices domestically and globally, chiefly the inflation readings.
In its previous meeting, held on 5 August, the MPC decided to keep the CBE’s overnight deposit rate, overnight lending rate, and the rate of the main operation unchanged at 8.25 percent, 9.25 percent, and 8.75 percent, respectively.
The discount rate was also maintained at 8.75 percent.
Earlier this week, Fitch Solutions downgraded Egypt’s real GDP growth slightly to three percent in 2021, down from the 3.1 percent projected in July, while maintaining Egypt’s inflation forecast at 5.1 percent.
Fitch attributed its forecast to a number of factors, including the deal Egypt’s government signed with Italian company ENI for the sake of producing and exporting green hydrogen, with the government expecting to invest around $4 billion on the project over the next three years.
Focus Economics also projected Egypt’s inflation to average 5.4 percent in the calendar year 2021, which is the same projection it announced in July, expecting it to soar to 6.5 percent in the calendar year 2022.