Egypt’s Inflation Rate Drops to 25.5% in November
In a recent report by the statistics agency CAPMAS, Egypt’s annual urban consumer price inflation rate has decreased to 25.5 percent in November from 26.5 percent in October. This marks a slight improvement in the country’s economic situation.
The Impact of Global Events
The sudden surge in inflation earlier this year was a direct result of the Russian invasion of Ukraine, causing foreign investors to pull out billions of dollars from Egyptian treasury markets. This put immense pressure on the economy and led to a record high of 38.0 percent inflation in September 2023.
Analysts’ Predictions
Despite the slight decrease in inflation, the median forecast of 15 analysts in a Reuters poll had anticipated a further drop to 26.4 percent last month. The economy is still on a path to recovery, albeit at a slower pace than expected.
Monthly Insights
On a monthly basis, headline inflation rose by 0.5 percent in November, a significant decrease from the 1.1 percent increase seen in October. Food prices also saw a decrease of 2.8 percent compared to the previous month, but still remained 23.3 percent higher than the previous year.
Money Supply and Inflation
The inflation spike has largely been driven by a surge in the money supply. Egypt’s M2 money supply grew by 29.54 percent year on year in October, according to central bank data. This indicates a need for careful monitoring and management of the country’s monetary policy to stabilize the economy.