A Reuters poll conducted today, Monday, suggests that headline inflation in Egypt will continue to rise after it was already recorded at the highest level in five years in November, while the devaluation of the local currency, the pound, in October, shadow over the economy.
The median forecast of 15 analysts showed that annual inflation reached 20.50% in December, compared to 18.7% in November, the highest level since December 2017.
“This is mainly due to the effects of the devaluation of the pound sterling at the end of October, as well as the continued depreciation of the currency in the parallel market until December,” Goldman Sachs said in a note.
The central bank devalued the Egyptian pound by about 14.5% on October 27 and allowed it to continue its gradual and slow decline in November and December.
The five analysts also expected core inflation to jump to 23.6% from 21.5% in November.
Rising inflation will force the central bank’s monetary policy committee to raise interest rates at its next meeting on February 2.
Tomorrow, Tuesday, the Central Agency for Public Mobilization and Statistics will publish inflation data for December.
