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Headline inflation rises for second month in September
Egypt’s annual headline inflation — total inflation in an economy — rose for the second consecutive month in September to 26.4%.
This is up from August’s figures of 26.2%, according to data from the Central Agency for Public Mobilization and Statistics (CAPMAS).
In spite of the hike, annual inflation remains considerably lower than the 40.3% recorded in the same month the year before.
Driving the increase:
CAPMAS attributed the increase in headline inflation primarily to a hike in the prices of electricity, gas, and fuel by 14.9 %; vegetables by 12.4%; medical supplies (by 3%); dairy products, cheese, and eggs (by 2.8%); and vehicle purchases (by 2.3%).
Core inflation:
Monthly core inflation — which excludes volatile items such as food and energy prices — fell 0.1% month-on-month to 25.0%.
Remember:
September’s inflation data could increase the likelihood of the central bank holding interest rates steady at 27.25% for the fourth time at its policy meeting on October 17, according to Forbes’ analysis.
Going forward:
The Central Bank of Egypt (CBE) has set the inflation target at 7% (±2 percent) in the fourth quarter of 2024.
Meanwhile, Fitch projected in its latest country report that Inflation in Egypt will reach 29.0% in 2024 and 18.1% in 2025, before stabilizing at an average of 7.0% annually from 2026 to 2033.
What else is clapping?
American oil giant Chevron will invest USD 150 million to drill an exploratory well — dubbed “Singer” —- in the Mediterranean Sea next month as part of its plan to expand its natural gas output in Egypt, a government official told Asharq. This comes as the country wrestles with LNG shortages after becoming a net importer. Egypt’s demand for the resource totals some 6.2 billion cubic feet a day, while it only produces 4.6 billion.
The Central Bank of Egypt is expected to leave interest rates unchanged at its upcoming meeting, according to a recent poll by “Asharq Business”. The bank is projected to hold rates steady until February 2025 as fuel price hikes continue to impact the cost of food items, one analyst noted.
Suez Canal Bank has agreed to extend credit facilities worth EGP 1.2 billion to Raya Information Technology to help finance the latter’s expansion plans.
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