Egypt inflation slows more than expected in January

Points clés à retenir

The rapid expansion of money supply over the past two years has contributed to a swift rise in prices and a significant depreciation of the Egyptian pound, which has lost nearly 50% of its value against the U.S. dollar since March 2022. This significant devaluation reflects the challenges facing the Arab world's third-largest economy, characterized by a shortage of US dollars and escalating foreign debt. In response to these economic pressures, Egyptian banks have suspended all debit card transactions in foreign currency to curtail foreign exchange spending. In May, Fitch Ratings downgraded Egypt's outlook to negative—the country's first downgrade since 2013—citing a lack of economic reforms and fiscal system. Additionally, Moody's recently downgraded Egypt's credit rating by one notch, from 'B3' to 'Caa1,' over deteriorating debt affordability as a key concern. These rating downgrades underscore the country's economic difficulties and the need for substantial reforms.