Cairo — Egypt’s inflation rate is forecast to have tumbled to 14.5% in February, as the exceptionally high price increases of the last two years are no longer reflected in the statistics, according to a poll released on Wednesday.
The median forecast of 15 analysts polled by Reuters was for annual urban consumer inflation to have plunged to 14.5% from 24.0% in January. The data was collected from Feb. 27 to March 5.
“February is the month where the annual base effect will finally fade away, resulting in a major drop in headline annual inflation,” said Mohamed Abu Basha, of EFG Hermes, who predicted inflation would fall to 13.7%.
“We do, though, expect an elevated monthly reading due to seasonality associated with Ramadan.”
Esraa Ahmed of Pharos said the monthly price increase had been exceptionally high in February of last year.
Inflation had been trending downwards since it surged to an all-time peak of 38% in September 2023.
Price rises have been fuelled in part by rapid growth in the money supply. M2 money supply rose by an all-time high of 32.1% in the year to end-January, central bank data showed.
The economy was boosted by a $24 billion real estate investment on the Mediterranean coast by Abu Dhabi in February 2024 and a subsequent $8 billion financial support package signed with the International Monetary Fund signed on March 6, 2024.
The government statistics agency CAPMAS is due to release inflation figures on Monday morning.
Six of the analysts predicted that core inflation would decrease to 15.4% in February from 22.6% in January.
*Vijayalakshmi Srinivasan & Veronica Khongwir; Patrick Werr; editing: Chizu Nomiyama – Reuters
