Egypt: Consumer confidence falls off a cliff
Consumer confidence in Egypt declined dramatically as few Egyptians believe an end to the woes is around the corner
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Egypt's Consumer Confidence Index showed a 16 per cent drop in December 2012, reflecting greater uncertainty about the future of the economy.
The index, published monthly by the cabinet's Information and Decision Support Centre (IDSC), dropped to 83.2 points in December from 98.8 a month earlier. The neutrality level is at 100 points.
The three sub-indices that make up the Consumer Confidence Index all dropped in December. The economic-policy confidence index saw the sharpest fall out of the three, losing 29 per cent.
Only 8.5 percent of Egyptians believe the economic state of Egypt has improved in December 2012 over the same month last year. Expectations of improved economic and living conditions for both individual households and the society as a whole fell by 10.1 per cent, but remained the highest among other indices.
The family income index also dropped by nearly 11.4 per cent in December, with only 20.1 per cent of those polled believing that the time was suitable to purchase durable goods, compared to 24.4 per cent in November 2012.
Egypt's economy is currently going through turbulent times. The Egyptian pound lost some six per cent of its value since the Central Bank of Egypt (CBE) introduced a new currency regime on 30 December. Net foreign reserves, which the CBE used throughout the past two years to protect the pound from sharp devaluation, have fallen to critical levels.
Meanwhile, Egypt was asked to delay a much needed US$4.8 billion loan from the International Monetary Fund (IMF) on 11 December after President Morsi issued a tax increase on 9 December, then withdrew on the same day for fear of popular backlash. The tax hikes were part of the government's reform programme attached to the IMF deal.
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