The National Bank of Kuwait (NBK) scaled down the impact of the decision to raise fuel prices in Egypt on inflation rates, and expected to record during the current fiscal year 12.5% despite the recent increase in prices of gasoline, diesel and electricity. The report revealed that inflation will fall to 9% in 2020/2021, compared to an inflation rate of 20.9% in the fiscal year 2017/2018, although there is uncertainty associated with the movements of oil prices, exchange rates and food prices.
According to the report, the decline in inflation helped the Egyptian central bank to cut interest rates by 100 basis points in February 2019, the interest rate is likely to decrease by 100 to 200 basis points by mid-2020, thereby reducing the cost of debt servicing and reducing private sector costs.
Egypt has made remarkable progress in the implementation of the economic reform program, which has resulted in GDP growth from 5.3 percent in the fiscal year 2017/2018 to 5.6 percent in the first nine months of last fiscal year.
The Egyptian economy is expected to continue strong growth of 5.2% in the current fiscal year 2019/2020, with growth of 5% in the next fiscal year, thanks to higher capital spending, the recovery of the tourism sector and the continuous increase in natural gas production.
Source: (Al Ain News Website, Edited)
