Annual inflation in Egypt was up by 14.4% in February, as a result of the increase in the prices of food commodities by 15.4%, according to Beltone Financial.
Managing Director and General Manager at Farm Frites Ahmed Seddik told Asharq Al-Awsat newspaper that in case the purchasing power was influenced in the country then exporting is the solution for giant firms.
Seddik added that Farm Frites managed to increase its production and exporting capacity during its presence in the Egyptian market.
Egypt’s government approved Friday a new program to back exports represented in providing monetary support of around 40 percent, taxation and customs discount of around 30 percent, and logistics and technical support of around 30 percent.
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The Agriculture Export Council aims to increase exports to USDUSD3.5 billion from USD2.2 billion within 5 to 7 years.
Chairman of the Agriculture Export Council Abdel Hamid al-Demerdash said that the target can be achieved in case some obstacles were removed such as joining International Union for the Protection of New Varieties of Plants (UPOV) and activating the role of National Food Safety Authority in local markets.
Egypt’s Minister of Finance Mohamed Moeit said that the implementation of the economic reform program is ongoing for the sake of providing real resources to improve the living standards of citizens. This would reflect the purchasing power of people and creating a business-conducive environment.
Moeit, in a statement, stressed that the economic condition in Egypt is stable and this contributed to the increase of growth rate of GDP and restoring the economy, a matter that was praised by international institutions and was a reason for upgrading the sovereign rating in Egypt.
Egypt’s annual urban consumer price inflation increased to 14.4 percent in February from 12.7 percent in January.
According to Beltone Financial, the increase was due to a rise in the prices of fruits and vegetables by 7.4% on a monthly basis, resulting in an annual increase of 32.7% from 23.7% recorded in January 2019.
At the same time, all other sectors remained unchanged, with the exception of the clothing and footwear sector rising by 9.9% from 7.6% last month as a result of the change in the base year.
The monthly inflation rate rose to 1.7% from 0.6% in January, which is more than Beltone’s forecast of 1%, and core inflation rose by 9.2% from 8.6% in January.
“In the light of the absence of many supporting factors like a change in the base years, it was expected to see an increase in inflation rates beyond the rates of December 2018, which pushed the CBE to decrease the target inflation rate to 10% in 2021,” Beltone said.
“We expect the readings, in general, to remain affected by the uncertain volatile path of food commodities, making the increases in inflation only temporary,” Beltone added.
The investment bank added that the mission of CBE is to achieve a balance between growth and inflation, in addition to supporting the government’s reform program, where reducing debt service burdens plays a major role, as it represented 10% of the GDP in 2017/18.
