VenturesNow

Egypt’s headline inflation surges but core inflation eases to offer some hope

Published

1 year ago

September 10, 2023

Egypt’s official data agency, CAPMAS has revealed that the country’s headline inflation, driven the basket of goods that comprise consumer price index, rose higher than expected to hit 37.4% in August from 36.5% in July.

Data from CAPMAS on Sunday however shows core inflation, which strips out volatile items like food and fuel, ease slightly to 40.4% from 40.7% in July and 41% in June.

Headline inflation in July was 36.5% and in June 35.7%, both also all-time highs. That is, month-on- month, it rose 1.6% in August, down from 1.9% in July and 2.08% in June.

Some experts like Allen Sandeep at Naeem Brokerage have suggested that the gradual month-on-month decline could be a positive sign. Holding that “It is tentatively a sign that prices are consolidating at these levels”, he said.

According to the consensus prediction of the 14 analysts surveyed last week, annual urban consumer inflation increased to 37.1% in August. The previous high of 32.95% was recorded in July 2017.

The economy of Egypt has been declining recently. According to a financial ratings agency, Moody’s, Egypt is one of the five nations in the world most at risk of defaulting on its external debt. In recent years, Egypt has relied heavily on bailouts from Gulf nations and the IMF.

Egypt is currently ranked 11th out of 14 nations in the Middle East and North Africa, and its overall score is lower than the average for the area and the entire world.

VenturesNow

IMF mission concludes 4th loan program assessment in Egypt

Published

5 hours 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.

VenturesNow

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

Published

2 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.