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Egypt’s inflation unexpectedly accelerated to 26.2% in August

Published

2 months ago

September 10, 2024

Egypt’s annual urban inflation rate unexpectedly rose to 26.2% in August from 25.7% in July, according to figures from the CAPMAS statistics agency released on Tuesday.

Prices rose 2.1% month on month, outpacing a 0.4% increase in July. Food prices increased by 1.8% in August, after falling by 0.3% in July, and were 29.0% higher than a year ago.

According to a poll of 19 economists, August urban inflation is anticipated to drop to a median of 25.1%.

Sara Saada of CI Capital was one of the few analysts who forecast that inflation would rise.

“We expected this, as the August reading reflects energy price hikes that were announced in the last week of July. This included diesel, that has a broad-based effect,” she said, speaking to Reuters after the figure was announced.

Prices have risen in the last month due to rising summer product prices, 10-15% fuel hikes around the end of July, a 25-33% increase in metro tickets at the beginning of August, and a 21-31% increase in energy bills, partially in August.

Inflation has been progressively dropping since September’s record high of 38.0%, and the central bank’s real overnight borrowing rate, at 27.25%, became positive in July for the first time since January 2022.

Egypt is one of Africa’s largest economies. In 2022, it ranked second after Nigeria, with a GDP of over 475 billion US dollars.

Although many economies throughout the world experienced contractions owing to the coronavirus (COVID-19) epidemic, the country maintained a positive real GDP growth rate over the same period.

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IMF mission concludes 4th loan program assessment in Egypt

Published

2 days ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

4 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.