Mubasher: Egypt’s economy is forecast to see a sharp downside curve in the coming year, said Capital Economics on Thursday, expecting GDP growth to slow down by 1%, lower 3% than its earlier estimates.
Inflation is likely to aggressively rise in the coming year as well and to reach its peak at 22% by mid-2017, which will likely erode household incomes, weaken consumptive spending, and wane economic growth by turns, said the research firm in a report.
The Central Bank of Egypt could accordingly hike key interest rates by 150 points in the upcoming monetary meeting on 23 December to absorb the fast-tracking inflationary pace.
Egypt’s core inflation annually increased to 20.73% in November compared with 15.72% in October, said the Central Bank of Egypt (CBE) on Thursday.
On a monthly basis, inflation rose to 5.33% in November from 2.81% a month earlier.
Earlier on Thursday, the Central Agency for Public Mobilization and Statistics said the core price index (CPI) annually soared to 20.2% in last November.
The index, which covers urban consumers only, monthly increased 19.4% or 205.3 points in November, CAPMAS added.
Earlier, the International Monetary Fund expected inflation to shoot up above 18% during the coming year.
