The Egyptian economy starts the year out of steam

On a market in Cairo, January 12, 2023. Egypt struggles between inflation and a plummeting currency.

AP - Amr Nabil

Text by: RFI Follow

1 min

2022 will remain an

in Egypt for consumers and businesses.

Inflation has reached a rate of 22%.

There are several reasons for this: the Ukrainian crisis, the high cost of wheat, devaluation and lack of foreign currency for imports.

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How to slow down inflation when the country has no more currencies, drags an external debt of 140 billion dollars, and must import the majority of what it consumes?

The situation has become hellish for consumers.

If inflation reaches 22% in 2022, for food and beverages, it is close to 40%.

The war in Ukraine has increased the price of wheat and cereals in general.

Three devaluations in one year

But the main factor in the rise in prices comes from the plummeting of the Egyptian pound: three devaluations in one year and a fall of nearly 70% in the currency.

This makes imports all the more expensive.

The dollar has become rare and therefore expensive.

Importers can no longer pay their foreign suppliers.

In the warehouses of the port, goods for a value of 7 billion sleep for lack of currencies to pay the suppliers, according to the Egyptian press.

The support of the Gulf monarchies

The financial support of the Gulf monarchies and the IMF, which signed a three billion dollar aid plan in December, provides a breath of fresh air.

Cairo also hopes to receive five billion dollars from its partner countries to complete its budget.

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