CAIRO: Egypt’s annual urban consumer-price inflation rate declined to 7.5% in August, the lowest rate in years, and analysts said it opened the way for further rate cuts by the central bank.
The inflation rate, reported by the official statistics agency CAMPAS on Tuesday, was lower than some analysts expected. The July pace was 8.7%.
Egypt is approaching the end of an economic reform program backed by the International Monetary Fund that during 2017 saw inflation rise to a high of 33%.
Core inflation, which strips out volatile items such as food, also declined, to 4.9% in August from 5.9% in July, the central bank said on Tuesday.
According to Refinitiv data, August’s headline rate was the lowest in more than six years.
“[August’s rate] falls well below the 9% target the Egyptian Central Bank had set itself for the end of 2020. This paves the way for another large rate cut on Sept. 26,” said Jaap Meijer, head of equity research at Arqaam Capital.
The central bank cut rates by 150 basis points at its last monetary policy committee meeting, on Aug. 22, encouraged by the declining inflation rate.
Radwa El-Swaify, head of research at Pharos Securities Brokerage, said the August number is “positive and gives positive signs for interest rates in the next meeting. We expect a cut of 1%-1.5%.”
Egypt raised domestic fuel prices in July 2019 as part of the terms of the IMF agreement, and the increase had been expected to push up prices for transport, food products and other goods.
Nadene Johnson, an economist at NKC African Economics, said the August inflation number resulted partly from a favorable base effect from a year earlier. In August 2018, Egypt’s headline inflation rate was 14.2%, after subsidies were cut.
She also said a strengthening currency as well as low global oil prices “would support further easing of price pressures.”
“Nonetheless, with energy reforms complete, and with global oil prices on the bearish side, we expect inflation to ease gradually in the coming year, albeit slightly higher toward the end of this year,” Johnson said.
Egypt’s August inflation rate falls to 7.5%, lowest in years
Egypt’s August inflation rate falls to 7.5%, lowest in years
- The inflation rate was lower than some analysts expected
- The July pace was 8.7%
Work suspended on Riyadh’s massive Mukaab megaproject: Reuters
RIYADH: Saudi Arabia has suspended planned construction of a colossal cube-shaped skyscraper at the center of a downtown development in Riyadh while it reassesses the project's financing and feasibility, four people familiar with the matter said.
The Mukaab was planned as a 400-meter by 400-meter metal cube containing a dome with an AI-powered display, the largest on the planet, that visitors could observe from a more than 300-meter-tall ziggurat — or terraced structure —inside it.
Its future is now unclear, with work beyond soil excavation and pilings suspended, three of the people said. Development of the surrounding real estate is set to continue, five people familiar with the plans said.
The sources include people familiar with the project's development and people privy to internal deliberations at the PIF.
Officials from PIF, the Saudi government and the New Murabba project did not respond to Reuters requests for comment.
Real estate consultancy Knight Frank estimated the New Murabba district would cost about $50 billion — roughly equivalent to Jordan’s GDP — with projects commissioned so far valued at around $100 million.
Initial plans for the New Murabba district called for completion by 2030. It is now slated to be completed by 2040.
The development was intended to house 104,000 residential units and add SR180 billion to the Kingdom’s GDP, creating 334,000 direct and indirect jobs by 2030, the government had estimated previously.
(With Reuters)
