Monthly inflation in Egypt drops to 4.5%, annual rate rises to 6.5%: CAPMAS – Economy – Economy
This is the lowest inflation rate recorded since July.
Meanwhile, annual inflation jumped in December to 6.5% from 6% in December 2020, added CAPMAS.
The decrease in the monthly inflation rate was mainly due to food and beverage prices falling by 1.2%, while prices for other basic products rose by 0.6% to 1.4%. said CAPMAS.
The agency attributed the increase in the annual inflation rate to the significant rise in food and drink prices, which rose by 9.7%.
On the other hand, prices for health services increased in December by 3.2%, education services by 13.9% and entertainment and agricultural services by 11.7%, compared to December 2020.
According to its recent forecast, the International Monetary Fund (IMF) expects Egypt’s inflation rate to accelerate to 6.3% in 2022, after predicting that the rate would reach 4.5% in 2021.
The Central Bank of Egypt has scheduled the first meeting of its Monetary Policy Committee (MPC) for 2022 on February 3 to review policy interest rates in light of recent macroeconomic updates at global and local levels, in especially the recent inflation figures.
The MPC recently decided to keep its current main rates unchanged at 8.25%, 9.25%, 8.75% and 8.75% for the overnight deposit rate, overnight lending rate and the discount rate, respectively.
At its last meeting of 2021, held on December 16, the CBE said Egypt’s inflation readings were still below the bank’s inflation target until the fourth quarter (Q4) of 2022, set at 7% (± 2%).
In December 2020, the CBE reset the inflation target to seven percent (±2 percent), from nine percent (±2 percent).
Analysts and banking experts expect the CBE to raise interest rates in 2022 amid the ongoing global inflation wave and the impending policy tightening that the US Federal Reserve (FED) is expected to approve in 2022 to deal with rising inflation and the pandemic. severe impacts.
Following its last meeting in December, the Fed held interest rates steady, hinting that it would raise interest rates to as much as 3% in 2022.