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Wednesday, 21 October 2020

Egypt’s average inflation to rise to 9.5% by end of FY20-21 -World Bank update

Average annual inflation in Egypt is expected to increase to 9.5% by the end of the current fiscal year before edging up to 10% in FY2021-2022, the World Bank said in Egypt's Economic Update this week. Inflation has been stabilizing since the beginning of FY2019-2020, and continued to fall to record a 5.7% average throughout (from 19.6% over the previous three years), the bank said. The deceleration is due to subdued demand from the onset of the pandemic and falling global commodity and oil prices, it added.

Where we are now: The headline rate hovered between 3.4% and 4.2% since the start of the fiscal year in July. A point close to record lows at 3.4% was reached in August, followed by a slight uptick to 3.7% last month. The central bank’s 50 bps rate cut last month may help to stimulate inflation in the remaining months of the year to keep it within its inner band target of 6-12%.

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