COMMENTS: Inflation was expected in Egypt after the IMF induced austerity measures of 2016 that included floating the Egyptian pound, raising taxes and reduction subsidies. The June 2018 figures indicate that “urban consumer” inflation rose to 14.4% from 11.4% in May, especially after the recent increase in fuel and electricity rates. However, Egyptian inflation had reached an all-time high of 33% in 2017 but has since receded to its present level. This rate may be high but may be expected as the economy re-balances itself and redirects its resources. (Check our article on the Egyptian economy outlook in 2016)
GENERALLY: Moderately negative and expected.
NEGATIVE FOR: The consumers in the cities. Possibly less so for the rural population.
POSITIVE FOR: High inflation is not positive for anyone.
IMPACT POTENTIAL: Medium, as long as it doesn’t dramatically surge upwards.
TIME SCOPE: Short Term
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