Egypt’s inflation lowest in nearly a decade

Author: 
AFP
ID: 
1573313543900549600
Sat, 2019-11-09 15:19

CAIRO: Egypt’s inflation rate dropped to the lowest level in
nearly a decade last month, official figures showed 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.
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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Source: FS – All-News-Economy
Egypt’s inflation lowest in nearly a decade