An Egyptian buys fruits at a supermarket in Cairo, Egypt, Sunday, Feb. 26, 2023. AP
Egypt has been experiencing an inflationary wave since the onset of the war in Ukraine which sparked in March 2022, maintaining its double digits zone for months. This wave is mainly driven by the soaring prices of foodstuff as well as the global supply chain disruptions, in addition to the pilling up of imported goods in ports.
Egypt’s annual headline inflation rate accelerated in March to 33.9 percent in 2023, up from 12.1 percent in March 2022, and above the rate of 31.9 percent recorded a month earlier, according to the latest calculations published by the Central Agency for Public Mobilisation and Statistics (CAPMAS).
In its latest update on the World Economic Outlook, released in April, the IMF expected Egypt’s inflation to maintain its double digits position in both 2023 and 2024, projecting it to eventually slow down to 21.6 percent and 18 percent, respectively.
For the country’s real GDP growth, the Fitch report revised up its forecast for Egypt's real GDP growth to 3.4 percent in 2023, up from the 3 percent it projected a month ago.
Both the IMF and the World Bank downgraded Egypt’s real GDP outlook to 3.7 percent in 2023, and 4 percent in current FY2022/23, respectively.
“The CBE's primary focus in the current period is curbing inflation. We are targeting a 7 percent (±2 percent) inflation rate by the fourth quarter of 2026," the Governor of the Central Bank of Egypt Hassan Abdallah told Ahram Online in April on the sidelines of the IMF’s/WBG’s spring meetings held 10-16 April.
Since March 2022, the CBE hiked the key interest rates by a total of 10 percent (1000 bps) and devaluated the Egyptian pound against the US dollar by over 75 percent in a bid to contain the soaring inflation.