Arab Finance: The International Monetary Fund expects Egypt to control inflation rates at a faster pace by next year, reaching 21% compared to its previous estimates, according to Data contained in the World Economic Outlook report issued on Tuesday.
However, the Fund raised its expectations for inflation levels during this year to reach approximately 33% from previous estimates by about a percentage point less.
These expectations come after inflation rates accelerated last month to 26.4%, contrary to analysts’ expectations. It is expected that Egypt will face a new wave of price increases that may reach 15% after the country raised fuel prices for the third time this year.
However, the Central Bank of Egypt says in its latest data that the gradual decline in food commodity inflation, along with the improvement in inflation expectations since the beginning of the year, indicates that inflation will continue on its downward path, even if its pace is constrained by measures to adjust public financial conditions.
The Central Bank appears to agree with the IMF’s estimates regarding inflation prospects next year, as it expects in its latest statement, after keeping interest rates unchanged for the fourth time in a row, that “the inflation rate will decline starting from the first quarter of 2025 with the cumulative effect achieved.” Monetary tightening decisions and the positive impact of the base period.
This is also in line with the expectation of Goldman Sachs and EFG Hermes, among others, that Egypt’s inflation rate will remain at approximately the same level until January, before a comparison with the previous year’s level leads to a sharp decline in inflation in February. .
In its report, the Fund maintained its expectations for Egypt’s real GDP growth at 4.1% in the current fiscal year ending in June 2025, from its estimate of 2.7% growth in the last fiscal year, and with little change from the report issued in July.
The North African country is emerging from a two-year economic crisis after securing a nearly $57 billion global bailout and devaluing its currency by about 40% in March.
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