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The Daily Star: Egypt’s economy rebounds as inflation drops, inflows rise

Egypt’s headline inflation rate rose at its slowest pace in nearly a year in November while the current account deficit fell by more than 65%.
12.12.17 | Interesting article at The Daily Star

Egypt’s headline inflation rate rose at its slowest pace in nearly a year in November while the current account deficit fell by more than 65 percent in the first quarter of the fiscal year, offering the latest evidence that the economy is rebounding 12 months after the currency flotation. Urban consumer prices rose 26 percent in November compared to 30.8 percent a year earlier, according to the official statistics agency. The month-on-month inflation rate eased to 1 percent compared to 1.1 percent in October. Food and beverage prices, the single largest component of the basket, rose by 32.3 percent.

Separately, the central bank said the current-account deficit had fallen to $1.6 billion in the first quarter of 2017-18, partly due to a rise in travel receipts between July and September to $2.7 billion from $767.7 million a year earlier. The overall balance of payments surplus rose to $5.1 billion from $1.9 billion.

“The economy is turning a corner: 2017 was a very difficult year and 2018 is probably going to be a better year and the recent data backs that up,” said Simon Kitchen, head of strategy at EFG-Hermes, Egypt’s largest investment bank. The cheaper pound has made exports more competitive, growth in imports has slowed and tourism is recovering, he said. “Looking ahead to next year you’ve got the gas story coming through as well,” he said, referring to Egypt’s plans to begin gas production at the giant offshore Zohr field.