- Egypt’s Inflation Rises to 14.1% in May
Egypt, Africa’s third-largest economy, continues to struggle with rising consumer prices despite adopting IMF economic reform programme.
Consumer Price Index, which measures inflation rate, rose to 14.1 percent in May, up from 13 percent in April, the official statistics agency CAPMAS said on Monday.
The inflation rate rose as high as 33 percent in 2017 after Egypt accepts to implement an IMF-backed economic reform programme.
Just a year ago, Egypt was lauded as a global investment destination by financial experts. Opening up the economy to more foreign investments. By December 2018, foreign holdings of local debt has risen by 20 percent from a year ago and expected to continue in 2019.
However, Foreign Policy, an economic policy magazine, has called the declaration a lie with General-turned-President Abdel Fattah al-Sisi and the International Monetary Fund as the architects.
“The government’s chronic mismanagement of public finances and overall negligence has caused external debt to rise nearly fivefold, due to depreciation of the Egyptian pound, in the past five years and public debt to more than double—and this is expected to continue for the foreseeable future.
“The government currently allocates 38 percent of its entire budget merely to pay off the interest on its outstanding debt. Add loans and installments, and more than 58 percent is eaten up.”
Foreign Policy accused the government of allocating most of the nation’s public resources to payment of debt rather than infrastructure, health care and education.
The magazine said if the trend continues “Egypt will soon be bankrupt”.
