This was demonstrated by a survey of analysts conducted by Reuters Egypt’s headline inflation rate likely accelerated in November, After the currency devaluation in October and continued import restrictions led to renewed upward pressure on prices.
The average forecast from 14 analysts showed annual inflation reached 18.75% in the past month, up from 16.2% in October and the highest level since December 2017.
Jaap Meyer, head of research at Arqaam Capital, attributed the rapid price hike to “high import bills”.
The central bank imposed import restrictions in February, before the Ukrainian crisis, and has devalued the currency since March.
On Oct. 27, the bank devalued the Egyptian pound by 14.5% and has since been allowed to gradually decline.
“The currency has moved 25% from a year ago, and that would add 2.5 to 5 percentage points in any country, and the increase has reached 10 percentage points,” said Charles Robertson, chief economist at Renaissance Capital.
Robertson added: “So it is likely that the foreign exchange rate will be responsible for one-third (the price increase) from a year ago, and oil could account for one-fifth and world grain prices for no less than one-tenth, and two-thirds of the uptick is easily attributable to the Egyptian pound, oil and food through the end of October.” 2022”.
Analysts polled had expected core inflation to rise to 21.6% from 19% in October.
Rising inflation would put pressure on the central bank to raise interest rates at its next meeting on Dec. 22.
The Central Agency for Public Mobilization and Statistics will release November inflation data tomorrow, Thursday.
