Latest news with #SriVirinchiKadiyala
Reuters
7 days ago
- Business
- Reuters
Egypt inflation seen climbing to 14.9% in May
CAIRO, June 3 (Reuters) - Egypt's annual headline inflation is forecast to have heated up in May, driven mainly by an unfavourable base effect, a Reuters poll found. The state statistics agency CAPMAS said it would release inflation figures on Wednesday, six days earlier than usual, due to the Eid al-Adha holiday that begins on Thursday. The median forecast of 12 analysts polled by Reuters was for annual urban consumer inflation to have risen to 14.9% in May from 13.9% in April. The polling data was collected on June 2 and June 3. "We expect headline CPI to accelerate to 15.5% in May from 13.9% in April, primarily due to unfavourable base, and some residual impact from energy price hikes undertaken in mid-April," said Sri Virinchi Kadiyala of Abu Dhabi's ADCB. He expected elevated real interest rates to provide ample room for the central bank to lower rates when it next meets on July 25. The government raised prices on a range of fuel products on April 11 by up to almost 15%, a move long sought by the International Monetary Fund. Egypt has committed to raising fuel prices to cover costs by the end of 2025. Annual inflation has plunged from a record high of 38% in September 2023, helped by an $8 billion financial support package signed with the IMF in March 2024. The falling inflation led the Central Bank of Egypt to cut its overnight lending rate by 225 basis points to 26.0% at its April 17 meeting, and by another 100 basis points on May 22. "The annual figure is likely to show a jump due to unfavorable base effects (nothing more)," wrote EFG Hermes economist Mohamed Abu Basha. "Hence, we do not read this jump as suggesting inflation is changing its deceleration course; it's just a bump before reverting back to the decelerating trend."
Egypt Today
27-04-2025
- Business
- Egypt Today
Reuters poll reveals regional economists' predictions for Egyptian economic growth
Cairo – April 27, 2025: Economists have lowered their growth projections for Egypt's economy in the coming years, citing factors such as tariffs imposed by the United States and expectations of a slowdown in global economic growth, according to a Reuters poll. The poll, conducted between April 9 and 23, surveyed 17 economists, who now predict Egypt's GDP will expand by 3.8 percent in the current fiscal year (FY2024/2025), down from the 4.0 percent forecast made in January. Growth is also expected to ease slightly in FY2025/2026, with a 4.6 percent expansion predicted, down from the previous 4.7 percent forecast. Sri Virinchi Kadiyala of Abu Dhabi's ADCB noted that the main impact of escalating trade tensions on Egypt is felt indirectly, through diminishing business and investor confidence. On the other hand, Ivan Burgara of the Institute of International Finance (IIF) argued that Egypt is somewhat insulated from U.S. tariffs, owing to a trade surplus with the U.S. and the relatively small volume of trade between the two countries. The more significant risk, he suggested, stems from the broader impact of slower global growth, particularly in Europe. The Reuters poll also projected Egypt's headline inflation to average 20.48 percent in FY2024/2025, with a further decrease to 12.2 percent expected in FY2025/2026. Despite a drop in growth to 2.4 percent in FY2023/2024—down from 3.8 percent the previous year, largely due to the currency crisis, the Gaza conflict, and reduced Suez Canal revenues—there are signs of recovery. The Egyptian economy regained momentum following an $8 billion financial reform deal with the International Monetary Fund (IMF) and a $24 billion investment agreement with the UAE's sovereign wealth fund for Mediterranean real estate projects. Preliminary data from Egypt's central bank suggested the economy continued to improve in the first quarter of 2025, exceeding the 4.3 percent growth rate recorded in the previous quarter. However, inflation remains a challenge, with headline inflation accelerating to 13.6 percent in March from 12.8 percent in February, following a steady decline from a peak of 38.0 percent in September 2023. Currency forecasts indicate that the Egyptian pound will weaken further, with analysts predicting it will fall to 51.87 per dollar by the end of June 2025, and to 53.10 by June 2026. Since the central bank allowed the pound to depreciate as part of the March 2024 IMF program, the currency has traded around 51.0 per dollar, a significant drop from its previous fixed rate of 30.85 to the dollar. Additionally, the central bank's overnight lending rate is expected to decrease to 24.25 percent by the end of June, down from the current 26.0 percent, with further cuts anticipated, bringing it to 17.75 percent by June 2026. This would mark the first rate reduction in nearly five years.
Reuters
23-04-2025
- Business
- Reuters
Economists trim Egypt's economic growth forecast on tariff concerns: Reuters poll
CAIRO, April 23 (Reuters) - Economists have trimmed forecasts for Egyptian economic growth this year and next, in part due to tariffs imposed by the United States and expectations of slower global growth, a Reuters poll showed on Wednesday. The median forecast in the April 9-23 poll of 17 economists was for gross domestic product (GDP) to grow 3.8% in the current fiscal year that ends on June 30, down from 4.0% predicted in a similar poll in January. GDP is expected to expand 4.6% in the 2025/26 fiscal year, down from 4.7% predicted in January. "The impact of escalating trade tensions on Egypt are mostly felt through indirect channels, i.e., through negatively impacting business and investor sentiment," said Sri Virinchi Kadiyala of Abu Dhabi's ADCB, adding that large external debts also weighed on Egypt. Ivan Burgara of the Institute of International Finance, or IIF, said Egypt was relatively sheltered from U.S. tariffs. "It has a trade surplus with the U.S., and overall trade between the two countries is small. The main shock would come via the secondary impact on global growth, particularly in Europe," he said. The Reuters poll forecast annual headline inflation of 20.48% in 2024/25 and 12.2% in 2025/26. Egypt's growth fell to 2.4% in 2023/24 from 3.8% a year earlier, according to central bank figures, dragged down by a currency crisis and the war in neighbouring Gaza, which cut into Suez Canal revenue and slowed tourism. It regained momentum after Egypt signed an expanded, $8 billion financial reform package with the International Monetary Fund and secured $24 billion from the United Arab Emirates' sovereign fund for real estate investment on the Mediterranean coast. The central bank this month said preliminary indicators suggested the economy continued to recover in the January-March quarter, exceeding the 4.3% recorded in October-December 2024. Headline inflation, which has trended downwards from a record high of 38.0% in September 2023, accelerated to 13.6% in March from 12.8% in February. According to the median currency forecast from analysts, the Egyptian pound will weaken to 51.87 per dollar by end-June 2025, and 53.10 by end-June 2026. Before letting it drop as part of the March 2024 IMF programme, the central bank had kept the pound fixed at 30.85 to the dollar. It now trades around 51.0 to the dollar. The central bank's overnight lending rate will decline to 24.25% by the end of June from 26.0% now, and to 17.75% by end-June 2026, according to analyst estimates. The bank cut its rates this month for the first time in nearly five years.
Zawya
08-04-2025
- Business
- Zawya
Egyptian inflation seen edging down to 12.6% in March
CAIRO: Egypt's annual inflation is forecast to have edged down further in March after a base effect caused it to plunge in February, according to a Reuters poll. The drop in annual inflation is likely to push the Central Bank of Egypt to cut interest rates when it meets on April 17, although it may keep any cut relatively small because of turmoil in international markets following U.S. President Donald Trump's tariff hikes, analysts said. The median forecast of 14 analysts polled by Reuters was for annual urban consumer inflation to have slipped to 12.6% in March from 12.8% in February. The polling data was collected from March 27 to April 7. Year-on-year inflation was 24.0% in January, before a base effect took hold after a year of financial reforms. "We expect CPI to edge down slightly to 12.5% y-o-y from 12.8% in February on softer food and education costs," said Sri Virinchi Kadiyala of Abu Dhabi's ADCB. "However, a more pressing concern for the CBE will be the ongoing volatility in global financial markets. If risk off sentiment worsens over the coming weeks, this increases the risk of CBE remaining on pause," Kadiyala said. Inflation has been trending downwards since it surged to an all-time peak of 38% in September 2023. Egypt's economy was boosted by a $24 billion real estate investment on the Mediterranean coast by Abu Dhabi in February 2024 and a subsequent $8 billion financial support package signed with the International Monetary Fund on March 6, 2024. "There is a question whether or not the central bank going forward is going to be more cautious given the external backdrop, and not cut rates to the rates that we are expecting," said Farouk Soussa of Goldman Sachs. "But for now, we're holding our call of over 1,100 basis points in cuts over the next nine months or so." The government statistics agency CAPMAS is due to release inflation figures on Thursday morning. (Polling by Vijayalakshmi Srinivasan and Rahul Trivedi. Writing by Patrick Werr. Editing by Mark Potter)
Reuters
07-04-2025
- Business
- Reuters
Egyptian inflation seen edging down to 12.6% in March
CAIRO, April 7 (Reuters) - Egypt's annual inflation is forecast to have edged down further in March after a base effect caused it to plunge in February, according to a Reuters poll. The drop in annual inflation is likely to push the Central Bank of Egypt to cut interest rates when it meets on April 17, although it may keep any cut relatively small because of turmoil in international markets following U.S. President Donald Trump's tariff hikes, analysts said. The median forecast of 14 analysts polled by Reuters was for annual urban consumer inflation to have slipped to 12.6% in March from 12.8% in February. The polling data was collected from March 27 to April 7. Year-on-year inflation was 24.0% in January, before a base effect took hold after a year of financial reforms. "We expect CPI to edge down slightly to 12.5% y-o-y from 12.8% in February on softer food and education costs," said Sri Virinchi Kadiyala of Abu Dhabi's ADCB. "However, a more pressing concern for the CBE will be the ongoing volatility in global financial markets. If risk off sentiment worsens over the coming weeks, this increases the risk of CBE remaining on pause," Kadiyala said. Inflation has been trending downwards since it surged to an all-time peak of 38% in September 2023. Egypt's economy was boosted by a $24 billion real estate investment on the Mediterranean coast by Abu Dhabi in February 2024 and a subsequent $8 billion financial support package signed with the International Monetary Fund on March 6, 2024. "There is a question whether or not the central bank going forward is going to be more cautious given the external backdrop, and not cut rates to the rates that we are expecting," said Farouk Soussa of Goldman Sachs. "But for now, we're holding our call of over 1,100 basis points in cuts over the next nine months or so." The government statistics agency CAPMAS is due to release inflation figures on Thursday morning.
