Egypt’s Inflation Rate Drops to 12.5% in February, Signaling Economic Recovery
Official data released on Monday revealed that Egypt’s annual consumer inflation rate has fallen to 12.5% in February, marking a significant decrease as the country continues to recover from its recent economic crisis. This decline comes after months of steadily decreasing inflation rates, with analysts attributing the dramatic drop from January’s 23.2% to a base effect.
Economist Wael el-Nahas explained that the comparison to last year’s extreme price jumps, where inflation reached 36%, makes the current rate appear lower. The monthly consumer inflation rate for February stood at 1.4%, slightly lower than January’s 1.6%, according to the Central Agency for Public Mobilisation and Statistics.
Credit: The National
The Egyptian economy, heavily reliant on imports, faced a parallel market crisis last year due to a shortage of foreign currency. This led to daily price increases for consumer goods in major cities. However, with a currency devaluation in March 2024 and substantial financial support from the World Bank, the UAE, and the IMF, Cairo has begun to show signs of recovery.
Since February 2022, the value of the Egyptian pound has plummeted by over 60%, peaking at around 40% inflation in August 2023. In response, authorities implemented various reforms, including three fuel price hikes in line with an IMF agreement that saw funding increase from $3 billion to $8 billion.
The IMF is set to approve a $1.2 billion tranche during its fourth review of the programme. Additionally, a new loan agreement worth slightly more than $1 billion is expected, following a proposal disclosed by the IMF last month. These financial injections aim to further stabilize Egypt’s economy and support its ongoing recovery efforts.
