1 week Ago By Kay Lee
The corridors of Cairo echo with cautious optimism as Egypt’s annual inflation is set to edge lower in March. A recent poll by Reuters indicates a forecast drop to 12.6% from February’s 12.
8%, adding a layer of complexity to the Central Bank of Egypt’s strategy on interest rates. Inflation’s Downward Dance Egyptian inflation, which soared to unprecedented peaks of 38% in September 2023, has been on a steady decline. January saw a sharp 24% before a base effect ameliorated the figures.
This cooling inflation might just pave the way for the Central Bank to contemplate interest rate cuts at its next meeting, though the global market’s unrest remains a poignant factor here. Global Winds Influencing Domestic Decisions The financial world is closely watching as U.S.
President Donald Trump’s tariff policies send ripples through international markets. Analysts, such as Abu Dhabi’s ADCB’s Sri Virinchi Kadiyala, wisely assert the CBE may hesitate before deep cuts considering potential evolving global financial volatility. Investments and Economic Projections Egypt’s economy has benefited from substantial foreign investments, notably a (24 billion real estate project by Abu Dhabi on its Mediterranean coast, alongside a significant )8 billion financial package from the International Monetary Fund.
Despite these optimistic indicators, caution echoes through the insights of Farouk Soussa of Goldman Sachs. His voice of reason highlights the potential cautious stance CBE might adopt amidst the unpredictable external backdrop. “The question remains if the central bank will act cautiously,” he notes while maintaining expectations of rate cuts over the coming months.
Looking Ahead As anticipation builds for the release of CAPMAS’s official figures, the updates unfold with mounting interest. Thursday’s announcement is keenly awaited, holding the potential to reshape the economic landscape in Egypt. The world and Egypt’s residents alike watch, hopeful and wary, as inflation dances downwards, intertwined with global economic shifts.
According to Reuters ..
