Egypt’s annual consumer inflation plummeted to 12.5% in February, according to official figures released Monday.
This dramatic decrease, from 23.2% in January, signals a potential turning point in the nation’s economic crisis.
Experts attribute the sharp drop primarily to a base effect, comparing current figures to last year’s extreme price surges.
Despite the encouraging numbers, the reality for Egyptian households remains challenging.
While the pace of price increases has slowed, the burden persists.
The Egyptian pound has lost over 60% of its value since February 2022, eroding purchasing power.
The government has implemented tough reforms, including fuel price hikes, to comply with an expanded IMF deal.
Egypt’s economy, heavily reliant on imports, was crippled by foreign currency shortages early last year.
The nation has secured over $50 billion in loans and investments from the IMF, World Bank, and UAE, aiming to stabilize its economy.
However, the nation faces a soaring foreign debt, reaching $155.2 billion by September 2024, largely due to infrastructure projects.
The ongoing conflict in Gaza and disruptions in the Red Sea, impacting Suez Canal revenues, further strain the economy.