Egypt’s inflation lowest in nearly a decade

Updated 09 November 2019

Egypt’s inflation lowest in nearly a decade

  • Poor and middle-class Egyptians have been bearing the brunt of harsh austerity measures since 2016 when the government secured a $12-billion bailout from the IMF in exchange for implementing economic reforms
  • Inflation had skyrocketed to 33 percent in 2017 following subsidy cuts and the devaluation of the Egyptian pound

CAIRO: Egypt’s inflation rate dropped to the lowest level in nearly a decade last month, official figures showed Saturday, as cheaper food offered respite to consumers squeezed by IMF-backed reforms.
The annual inflation rate was 2.4 percent in October, compared with 17.5 percent a year earlier, the Central Agency for Public Mobilization and Statistics (CAPMAS) said.
The state body said the decrease was due to a drop in the cost of household items such as food and drink.
“The increase in agricultural production led to a drop in prices of fruit and vegetables, which in turn affected food prices that make up about 40 percent of consumer costs,” Cairo-based economist Iman Negm told AFP.
“The Egyptian pound’s recovery against the US dollar has also contributed to the inflation rate slowing down,” she added.
Negm expects the central bank to cut interest rates because of the weaker price pressures.
Inflation had skyrocketed to 33 percent in 2017 following subsidy cuts and the devaluation of the Egyptian pound.
Poor and middle-class Egyptians have been bearing the brunt of harsh austerity measures since 2016 when the government secured a $12-billion bailout from the International Monetary Fund in exchange for implementing economic reforms.
Nearly one in three Egyptians live below the poverty line, according to official figures released in July.
CAPMAS said that other costs, such as transportation and health care, had risen.
President Abdel Fattah El-Sisi regularly calls on Egyptians to endure the economic hardships for the promise of future prosperity.
Egypt’s economy took a battering in the immediate aftermath of the revolution that toppled longtime autocrat Hosni Mubarak in 2011.
Direct foreign investment has grown to record levels in recent years, but the national debt has ballooned since the pound was floated in November 2016, leading to a sharp depreciation.


Oil retreats in face of renewed coronavirus uncertainty

Updated 22 February 2020

Oil retreats in face of renewed coronavirus uncertainty

  • G20 finance leaders to meet in Saudi Arabia at the weekend to discuss risks to the global economy
  • OPEC+ has been withholding supply to support prices and many analysts expect an extension or deepening of the curbs

LONDON: Oil prices fell on Friday as weak Asian data and a rise in new coronavirus cases fuelled uncertainty about the economic outlook while leading crude producers appeared to be in no rush to curb output.

Brent crude was down $1.56, or 2.6 percent, at $57.75 in afternoon trade, while U.S. crude dropped $1.25, or 2.3 percent, to $52.63.

"With Brent failing to breach the $60 level on Thursday despite better than expected U.S. oil inventory data, rising market uncertainty is dragging down oil prices on Friday," said UBS analyst Giovanni Staunovo.

"Market participants who benefited from the price rise in recent days might prefer not to go into the weekend with a long position."

 

China reports rise in coronavirus cases.

Japan factory activity shrinks at fastest pace since 2012.

Russia says early OPEC+ meeting no longer makes sense.

Finance leaders from the Group of 20 major economies meet in Saudi Arabia at the weekend to discuss risks to the global economy after new Asian economic and health data kept investors on guard.

Beijing reported an uptick in coronavirus cases on Friday and South Korea reported 100 new cases, doubling its infections. In Japan, meanwhile, more than 80 people have tested positive for the virus.

Factory activity in Japan registered its steepest contraction in seven years in February, hurt by fallout from the outbreak. 

"We still believe that the market is likely to trade lower from current levels, given the scale of the surplus over the first half of this year, and the need for the market to send a signal to OPEC+ that they must take further action at their meeting in early March," said ING analyst Warren Patterson.

Russian Energy Minister Alexander Novak said on Thursday that global oil producers understood it would no longer make sense for the Organization of the Petroleum Exporting Countries and its allies to meet before the planned gathering.

The group, known as OPEC+, has been withholding supply to support prices and many analysts expect an extension or deepening of the curbs.