It seems we are going through two eventful quarters on both monetary and fiscal sides. After announcing electricity tariff hikes back in May, the Egyptian government has announced fuel subsidy cuts on 5 July 2019, raising prices by 16-30%. Besides, fuel price-indexation mechanism implementation is expected in September. However, we believe average inflation rates will continue to improve in FY2019/20 and despite recent increases which were driven mainly by vegetables and fruits. Overall, we expect inflation in FY2019/20 to average about 12.3% then to start normalizing to single digits by fiscal year end (i.e. by mid-2020). Below, we spell out our view for Egypt’s inflation path throughout the current fiscal year (FY2019/20).
For more details, please read the full report below.