When the inflation rate in Egypt was 34.2%…a fierce battle began 7 years ago!

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It recorded these levels in mid-2017, and continued to drop to 4.9% at the beginning of 2020

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Since the Egyptian government announced the implementation of the economic reform program in November of 2016, the Central Bank of Egypt has entered into a fierce war with inflation and price rises. The war has continued over the past seven years, which often ends with the victory of the Central Bank’s measures and the return of inflation rates to the Egyptian government’s targets, and perhaps less than them. .

Many bouts of push and pull over the past years. When the Central Bank of Egypt decided to start moving exchange rates in order to reach a fair price for the exchange of the dollar against the Egyptian pound, and set a guiding rate at the level of 13 pounds on the first of November of the year 2016, this was followed by inflation reaching the highest level in Egypt’s history, and the rate recorded a level of 34.2% in the middle of the year. Year 2017.

This coincided with successive rises in the exchange rates of the dollar, which recorded in the official market the level of 19.60 pounds. But at the same time, the Central Bank of Egypt was able to control the currency trade and dealt several blows to traders and speculators, and the crisis ended with the return of the dollar exchange rates to the level of 15.77 pounds.

Although the inflation rate reached a level exceeding 34% in mid-2017, the Central Bank of Egypt did not intervene and announce raising the target rate to more than 7%, which is the same target number at the present time, despite the waves of inflation hitting the largest economies in the world. And pushed the US market, the largest economy in the world, to record inflation at the highest level in 4 decades.

How has the inflation rate evolved in Egypt since 2016?

The data collected by Al Arabiya.net indicate that the Central Bank of Egypt, through its procedures, managed to lower the inflation rate from 34.2% in mid-2017 to about 17.6% in February of 2018.

Then the inflation rate continued its decline, to record about 10% in February of the year 2019, and reached the level of 4.9% in February of the year 2020. However, with the world entering the Corona crisis and the governments beginning to spend generously on the health sector and the harsh repercussions that followed the pandemic, it has returned Inflation is expected to rise in the Egyptian market, to record about 10% in February of the year 2021.

However, with the measures announced by the Egyptian government, it was able to control the inflation rate at a level of 10% in February 2021. Then, the rate continued its decline, to record a level of 8.8% in February of last year.

However, with the series of crises that struck the world’s largest economies since the outbreak of the Russian war in Ukraine and the subsequent rises in energy and food prices that followed, in addition to the Egyptian government’s return to implementing new economic reforms, and with the government’s continued huge spending on national projects, the war has flared up again between the Bank The Egyptian Central Bank and inflation rates, to record a level of 26.5% during the month of January.

And through several measures announced by the Central Bank of Egypt since the outbreak of the dollar crisis in March of last year, Egypt avoided returning to the previous inflation rates that it recorded in mid-2017. 14% to 18%, in addition to allowing banks to move exchange rates according to supply and demand, a requirement stressed by international investment banks and the International Monetary Fund, and the Egyptian government succeeded in implementing it during the last period.

Unprecedented inflation in the world’s largest economies

And at a time when an unprecedented wave of inflation is sweeping most of the countries of the world, and despite the Corona pandemic crisis, and the global rise in commodity and energy prices, Egypt has maintained, during the current year 2021, inflation rates within the target range of the Central Bank, thanks to the reform program that boosted development rates and raised the standard of living of citizens. .

Egypt was the only country that achieved a successive decline in the inflation rate over four years, which is the largest decline in inflation in emerging markets, by 19 percentage points in 2020/2021 compared to 2016/2017, when it hit a record level of 23.5% at the time.

Inflation hit the world’s strongest economies during the past year, and the European Union recorded the highest level of inflation in its history at 4.9% during last November. It recorded 5.1%, the highest rate in 10 years.

In the recent statement of the Monetary Policy Committee in Egypt, the Central Bank of Egypt revealed that the annual rate of general urban inflation is expected to exceed its previously announced target level by the Central Bank of (7% ± 2 percentage points) on average during the fourth quarter of 2018. 2022.
The Monetary Policy Committee of the Central Bank of Egypt pointed to the recent increase in inflationary pressures on the demand side, which was reflected in the development of real economic activity compared to the maximum productive capacity, in the rise in prices of many items of the consumer price index, and in the increase in domestic liquidity growth rates.

In confirmation of the central bank’s commitment to achieving price stability in the medium term, and in parallel with the central bank’s previous announcement of targeting inflation rates on a downward path, the target inflation rates were set during the coming period at the level of (7% ± 2 percentage points) on average during the fourth quarter. from 2024, and the level (5% ± 2 percentage points) on average during the fourth quarter of 2026.

The Monetary Policy Committee confirmed that the future path of inflation rates depends on the cumulative increases in interest rates to date, which takes time to affect inflation rates.

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