Egyptian inflation is forecast to have ticked up in March as prices adjust to a currency devaluation and an interest rate hike early in the month.
This is followed by an increase in fuel prices two weeks later, a Reuters poll showed on Saturday.
The austerity measures are linked to a $8 billion financial support package agreed with International Monetary Fund in March.
This is coming after more than two years of chronic foreign currency shortage.
Annual urban consumer inflation is forecast to climb to 36.3 per cent from 35.7 per cent in February. This is according to the median forecast of 12 analysts.
The Central Bank allowed the Egyptian pound to plummet to about 49.5 to the dollar on March 6 from 30.85 pounds. The apex bank had kept it fixed for the previous 12 months.
The central bank also raised its overnight interest rates by 600 basis points.
“We think that inflation in Egypt will accelerate once again and will remain elevated over the coming months.
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“This is as the effects of the weaker pound and other administered price hikes, play out,” said James Swanston of Capital Economics.
Egypt raised prices on a wide range of fuel products on March 22. This is as it pressed ahead with a commitment made to the IMF more than a year earlier.
This measure is to allow most domestic prices to rise to international levels.
A median of three analysts surveyed expected core inflation, which excludes fuel and some volatile food items, to accelerate to 36.1 per cent in March from 35.1 per cent in February.
Inflation had been going down from September’s record high of 38.0 per cent but unexpectedly surged again in February.
The state statistics agency CAPMAS said it will release March inflation data on Monday. (Reuters)
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