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IMF sees inflation falling next year

IMF sees inflation shrinking by next year

The International Monetary Fund (IMF) projected Egypt to lower inflation at a faster pace by next year to reach an average of 21.2%. This is lower than the lender’s previous estimates.

Remember, this is in line with CBE projections:

The Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) held interest rates steady for the fourth time earlier this month.

The MPC said it decided to keep the CBE’s key interest rates unchanged until there is a significant and sustainable decline in inflation.

The Committee noted that inflation will start to decrease in Q1 2025 as the impacts of monetary tightening and previous baseline effects materialize.

For this year:

The IMF raised its inflation projections by 1% for this year to nearly 33%. This comes after Egypt’s fuel pricing committee raised fuel prices for the third time this year earlier this month.

The price increase affected all types of gasoline, diesel, and industrial mazut, with hikes ranging from 7.7% to 17%.

In other IMF-related news:

The cabinet will soon begin negotiations with the International Monetary Fund regarding the extension of fuel and electricity subsidy reductions, a government official told Asharq on condition of anonymity.

Slashing energy subsidies is crucial to unlocking Egypt’s loan program with the IMF.

Fuel subsidies drained EGP 39.3 billion from the government’s coffers during the first quarter of the current fiscal year, a government official told Asharq earlier this month.

The Egyptian Ministry of Finance has allocated approximately 154 billion EGP for petroleum product subsidies in the draft budget for the FY 2024-2025.

EGX approves temporary listing of United Bank’s shares

The Egyptian Stock Exchange agreed yesterday to temporarily list United Bank (UB) with an issued and paid-up capital of EGP 5.5 billion distributed over 1.1 billion shares at a nominal value of EGP 5 apiece.

The Central Bank noted earlier that the company’s IPO would take place before the end of the first quarter of 2025.

About UB:

UB, along with its non-banking division, have an extensive network consisting of 68 branches and a workforce of 1,800 individuals, the CBE noted.

In June 2024, the bank’s total assets increased to EGP 106 billion, up from EGP 72 billion in 2021.

UB’s profits also surged to EGP 1.742 billion by the end of December 2023, marking a notable rise from EGP 1.145 billion in December 2021.

The catalyst:

The move is in line with the International Monetary Fund’s requirement to accelerate implementation of the state privatization program. Expediting the government’s divestment program in the companies it owns and creating a “level playing field” that avoids unfair competitive practices by state-owned companies will be critical to keeping Egypt on the right track, the IMF noted.

Heliopolis Housing inks land purchase agreement worth EGP 2 billion

The Board of Directors of Heliopolis Housing and Development has approved the purchase of a 52,000-square-meter plot of land in Mansoura from the Cotton & Textile Industries Holding Co. at a value of EGP two billion, Almal reported.

Details:

The agreement follows negotiations that resulted in a 10% reduction from the final valuation of the land.

Remember, the company has been making big moves:

In July, the company announced a partnership with Madinet Masr for construction of a residential project spanning 491 feddans in New Heliopolis in eastern Cairo. The project is expected to add EGP 194.67 billion in revenues over 12 years, with Heliopolis holding a 36.5% stake in it.

And had a great 1H:

Heliopolis Housing and Development raised its profits 55.8% YoY in the first half of the year to EGP 1.389 billion compared to EGP 24.611 million in the same period in 2023.