Inflation slowed down in Egypt’s cities for the first time since June 2022, stopping an upward trajectory that lasted for about 10 months, amid a continuous rise in all prices of goods and services in the largest Arab country in terms of population, due to the lack of hard currency needed for imports and the accumulation of stuck goods at ports.
Amr El Alfy, Head of Research at Prime Financial, says that “the recent inflation figures came below expectations. The Central Bank needs to wait a bit to see the impact of the recent interest rate hike on the markets.”
According to data issued by the Central Agency for Public Mobilization and Statistics, consumer prices in Egypt increased by 30.6% in April on an annual basis, compared to 32.7% in March. On a monthly basis, the rate of inflation slowed down to 1.7% from 2.7% in March.
However, Moncef Morsi, co-head of research at CI Capital, expected the Central Bank of Egypt to continue raising interest rates by about 100 basis points to complement the tightening monetary policy, with inflation reaching levels above the target.
The research center “Capital Economics” also expected, in a recent report, that the Central Bank of Egypt would raise interest rates by 200 basis points during the next meeting, bringing the overnight deposit rate to 20.25%. The research firm attributed its expectations to a decline in investor appetite since the interest rate hike last March, and inflation has accelerated since then.