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 recoups losses as OPEC, US Fed see robust economy

Updated 14 November 2019

Oil recoups losses as OPEC, US Fed see robust economy

  • US-China trade deal will help remove ‘dark cloud’ over oil, says Barkindo

LONDON: Oil prices reversed early losses on Wednesday after the Organization of the Petroleum Exporting Countries (OPEC) said it saw no signs of global recession and rival US shale oil production could grow by much less than expected in 2020.

Also supporting prices were comments by US Federal Reserve Chair Jerome Powell, who said the US economy would see a “sustained expansion” with the full impact of recent interest rate cuts still to be felt.

Brent crude futures stood roughly flat at around $62 per barrel by 1450 GMT, having fallen by over 1 percent earlier in the day. US West Texas Intermediate crude was at $56 per barrel, up 20 cents or 0.4 percent.

“The baseline outlook remains favorable,” Powell said.

OPEC Secretary-General Mohammad Barkindo said global economic fundamentals remained strong and that he was still confident that the US and China would reach a trade deal.

“It will almost remove that dark cloud that had engulfed the global economy,” Barkindo said, adding it was too early to discuss the output policy of OPEC’s December meeting.

HIGHLIGHT

  • US oil production likely to grow by just 0.3-0.4 million barrels per day next year — or less than half of previous expectations.
  • The prospects for ‘US crude exports had turned bleak after shipping rates jumped last month.’

He also said some US companies were now saying US oil production would grow by just 0.3-0.4 million barrels per day next year — or less than half of previous expectations — reducing the risk of an oil glut next year.

US President Donald Trump said on Tuesday Washington and Beijing were close to finalizing a trade deal, but he fell short of providing a date or venue for the signing ceremony.

“The expectations of an inventory build in the US and uncertainty over the OPEC+ strategy on output cuts and US/China trade deal are weighing on oil prices,” said analysts at ING, including the head of commodity strategy Warren Patterson.

In the US, crude oil inventories were forecast to have risen for a third straight week last week, while refined products inventories likely declined, a preliminary Reuters poll showed on Tuesday.

ANZ analysts said the prospects for US crude exports had turned bleak after shipping rates jumped last month.