Thursday, January 16, 2020
I wrote – Manal Al-Masry:
The Monetary Policy Committee of the Central Bank of Egypt decided, at its meeting, on Thursday, to keep the rates of return on deposit and lending for one night and the price of the main process at the level of 12.25%, 13.25% and 12.75%, respectively, as well as to keep the credit and discount rate at 12.75%.
The annual rate of urban headline inflation was 7.1% in December 2019 compared to 3.6% in November 2019, where monthly inflation recorded a negative rate of 0.2% in December 2019, compared to a negative rate of 3.4% in December 2018.
The annual rate of general inflation came in line with the expectations of the Central Bank of Egypt, which is a natural reflection of the high negative impact resulting from the base period following the end of the impact of temporary supply shocks of fresh vegetables prices in the past year.
Meanwhile, the annual core inflation rate was 2.4% in December 2019 compared to 2.1% in November 2019 mainly due to the high prices of poultry.
Preliminary data indicate the stability of the real GDP growth rate to record 5.6% during the third quarter of 2019, after recording 5.6% during the fiscal year 2018/2019, the highest rate since the fiscal year 2007/2008.
Available data up to the second quarter of 2019 also showed an increase in the contribution of private domestic demand to lead the growth of economic activity since the beginning of 2019, exceeding the contribution of net exports.
The rise in the contribution of domestic private demand came as a result of the acceleration in the growth of private investments, which recorded the highest rate during the fiscal year 2018/2019 since the fiscal year 2005/06, as well as a gradual recovery in private consumption. Meanwhile, the unemployment rate recorded 7.8% during the third quarter of 2019, compared to a rate of 7.5% during the second quarter of 2019.
However, the numbers of workers continued to recover for the third consecutive quarter.
At the global level, the growth rate of the global economy has stabilized, the global financial situation has been facilitated, and the risks associated with global trade policies have decreased. Meanwhile, global oil prices are still subject to fluctuations due to potential supply-side factors that include regional risks.
The Central Bank said in its statement that in light of the above, the Monetary Policy Committee decided that the current interest rates are appropriate at the present time and are consistent with achieving the target inflation rate of 9% (± 3%) during the fourth quarter of 2020 and price stability in the medium term.