EM EMEA Flash – Egypt Economic Update

May 2024

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Egypt Economic Update – May 2024

Economic growth. Despite the economic challenges and currency crisis, Egypt has recently received significant international support, and maintains hope for its economic outlook.

Inflation. Headline consumer prices eased back to 32.5% y/y in April from 33.3% y/y in March. Core inflation dropped to 31.5% y/y in April from 33.7% y/y in March. However, it remains well above the Central Bank of Egypt’s (CBE) target, and another anticipated increase in fuel prices in the upcoming months could further exacerbate the situation.

Interest rates. This month, the CBE kept its deposit and lending rates at 27.25% and 28.25%, respectively, in line with our (and consensus) expectations (see here).

FX view. Within the EM EMEA complex, the Egyptian Pound (EGP) is screening robustly. A benign outlook for capital flows is supporting the currency, on the back of higher treasury receipts from the UAE’s investment in the Ras el Hekma project (see here).

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