Egypt’s inflation to hit 25.9% over 2023: Fitch Solutions

Doaa A.Moneim , Sunday 12 Mar 2023

Fitch Solutions raised its projection for Egypt’s inflation during 2023 to 25.9 percent, up from 18.3 percent it projected in February, according to its updated report on MENA Monthly Outlook.

Egyptians buy fruits at a supermarket in Cairo, Egypt, Sunday, Feb. 26, 2023. AP


Egypt’s annual headline inflation surged in February, reaching 31.9 percent. This is a notable increase from 10 percent in February 2022 and 26.5 percent the previous month, Central Agency for Public Mobilisation and Statistics (CAPMAS) said in March.

The calculation of the Central Bank of Egypt also showed that Egypt’s annual core inflation rate significantly accelerated to 40.3 percent in February, up from 31.2 percent in January 2023.

Egypt's current inflationary wave is being fueled by a shortage of hard currency, particularly the US dollar, and by elevated prices of commodities and goods, due to global supply chain disruptions caused by the ongoing conflict in Ukraine.

Despite that, Fitch raised its expectation for Egypt’s real GDP growth to 3.4 percent, up from three percent it expected in February, according to the report.

Egypt aims to achieve a 5.5 percent real GDP growth during the upcoming FY2023/2024, to be rolled out by 1 July, up from the three percent expected by end of the current FY2022/2023.

On a regional level, the report said that a rosier global outlook will boost demand for the exports of several MENA countries, leading to stronger real GDP growth in 2023.

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