ECONOMY

Egypt’s inflation lowest in nearly a decade

This picture taken on October 23, 2019 from the Cairo Tower shows a view of Abdel Moniem Riad Square in the downtown district. (AFP)AFP)

Egypt’s inflation rate dropped to the lowest level in nearly a decade last month, official figures showed on Saturday, as cheaper food offered respite to consumers squeezed by IMF-backed reforms.

The annual inflation rate was 2.4 percent in October, compared with 17.5 percent a year earlier, the Central Agency for Public Mobilization and Statistics (CAPMAS) said.

The state body said the decrease was due to a drop in the cost of household items such as food and drink.

“The increase in agricultural production led to a drop in prices of fruit and vegetables, which in turn affected food prices that make up about 40 percent of consumer costs,” Cairo-based economist Iman Negm told AFP.

“The Egyptian pound’s recovery against the US dollar has also contributed to the inflation rate slowing down,” she added.

Negm expects the central bank to cut interest rates because of the weaker price pressures.

Inflation had skyrocketed to 33 percent in 2017 following subsidy cuts and the devaluation of the Egyptian pound.

Poor and middle-class Egyptians have been bearing the brunt of harsh austerity measures since 2016 when the government secured a $12-billion bailout from the International Monetary Fund in exchange for implementing economic reforms.

Nearly one in three Egyptians live below the poverty line, according to official figures released in July.

CAPMAS said that other costs, such as transportation and health care, had risen.

President Abdel Fattah el-Sisi regularly calls on Egyptians to endure the economic hardships for the promise of future prosperity.

He has been met with limited pushback, in particular due to allegations of corruption among the political and military elite.

Rare, small-scale protests broke out in September calling for el-Sisi’s removal after an exiled Egyptian businessman accused the president and top military brass of rampant corruption.

Egypt’s economy took a battering in the immediate aftermath of the revolution that toppled longtime autocrat Hosni Mubarak in 2011.

Direct foreign investment has grown to record levels in recent years, but the national debt has ballooned since the pound was floated in November 2016, leading to a sharp depreciation.

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Last Update: Saturday, 9 November 2019 KSA 19:26 - GMT 16:26
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