The economic expert for the Middle East and North Africa at BNP Paribas, Mohamed Abdel-Meguid, expected, in an interview with Al-Arabiya, that the rates of inflation in Egypt peaking in the first quarter of 2023, at levels of 25-26% year-on-year.
Abdel Magid said that the jump in inflation rates will push the Central Bank of Egypt to raise interest rates by regarding 100-200 basis points, during the Monetary Policy Committee meeting in February and March.
He added that the weakness of the Egyptian pound led to a deterioration in the inflation rate, as the prices of products and commodities witnessed price jumps due to the parallel market for the currency, on the basis of which traders price commodities and products, and in which the dollar trades at levels exceeding 30 pounds.
He explained that the exchange market in Egypt has witnessed a gradual shift since the middle of last week, towards a flexible exchange rate, “managed float” instead of “managed fixation”.
“We expect the Egyptian pound to continue declining.. We do not expect the pound to stabilize in the twenty levels, it will most likely break through the 30 level, and it may stabilize in the middle of the 30s,” according to Mohamed Abdel-Meguid.
With regard to the issuance of savings certificates with a high interest rate of 25%, Abdel-Meguid said that it is a “necessary” step, but it is “temporary”… explaining: “Egypt over the past 20 years cannot meet 3 factors simultaneously (fixing the exchange rate and controlling the exchange rate). The interest rate, and the freedom of entry and exit of capital), and every time these factors come together, they harm the Egyptian economy sooner or later.
The Central Agency for Public Mobilization and Statistics in Egypt announced the inflation rates for the month of December 2022, as the annual inflation rate for the entire republic was 21.9%, compared to 19.2% for November and regarding 6.5%, for the same month of the previous year.
The general consumer price index for the whole Republic reached 143.6 points for December 2022, recording an increase of 2.1%, compared to November 2022.
The most important reasons for this increase are due to the increase in the prices of the fruit group by 7.6%, the dairy, cheese and eggs group by 6.4%, the cereals and bread group by 5.0%, the fish and seafood group by 3.1%, the meat and poultry group by 2.8%, and the sugar and sugary foods group by 2.5%. %.