IMF: Egypt's Inflation Rate to Drop 13% by End of 2017

Pedestrians walk past the International Monetary Fund headquarters’ complex in Washington. AP
Pedestrians walk past the International Monetary Fund headquarters’ complex in Washington. AP
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IMF: Egypt's Inflation Rate to Drop 13% by End of 2017

Pedestrians walk past the International Monetary Fund headquarters’ complex in Washington. AP
Pedestrians walk past the International Monetary Fund headquarters’ complex in Washington. AP

The International Monetary Fund (IMF) expected that inflation levels will fall sharply in Egypt by the end of this year, having risen at an accelerated pace due to reforms recommended by the international institution and applied by the country since November.

“The Central Bank of Egypt (CBE) remains committed to achieve its goal of reigning in inflation which is expected to decline to about 13 percent in the quarter ending December of 2018,” the IMF said in a statement on Friday, explaining that this rate constitutes about one third of the value of inflation, which has amounted to 32.1 percent from January to September.

The IMF's recommendation to liberalize the exchange rate prompted the CBE to lift local currency subsidy in November 2016, leading to the drop of the value of the Egyptian pound to more than half and the rise in inflation.

However, its monetary policy framework was underpinned by a flexible exchange rate regime which has eliminated chronic foreign exchange shortages and the parallel market.

Notably, Egypt has concluded a deal with the IMF in November 2016 to receive $12 billion in order to support reform processes.

The Fund team visited Cairo from October 25 to November 9, 2017 for discussions under Article IV of 2017 and for the second review of the performance of the International Fund for Agricultural Development (IFAD)-supported economic reform program.

At the end of the mission the IMF team issued a statement, indicating that Egypt has reached a staff-level agreement with the IMF for an installment of about $2 billion more from a three-year, $12 billion loan program.

“The payment, still subject to IMF executive board approval, will bring total disbursements under the program to about six billion dollars. Egypt is pushing through ambitious economic reforms under the loan deal,” the statement said.

As part of a second review, the IMF said broad reforms, which included a floatation of the pound currency, were beginning to pay off in terms of "macro-economic stabilization and return of confidence."

"While the reform process has required sacrifices in the short term, seizing the current moment of opportunity to transform Egypt into a dynamic, modern, and fast-growing economy will improve the living standards and increase prosperity," it added in its statement.

The IMF noted growth for the 2016/17 fiscal period had picked up to 4.2 percent compared to a forecast 3.5 percent, the current account deficit in dollar terms had narrowed and portfolio investments and foreign direct investment had increased.



Trump Announces 30% Tariffs Against EU, Mexico to begin August 1

President Donald J. Trump speaks at a roundtable discussion at the Community Emergency Operations Center in Kerrville, Texas, Friday, July 11, 2025. (Ricardo B. Brazziell/Austin American-Statesman via AP)
President Donald J. Trump speaks at a roundtable discussion at the Community Emergency Operations Center in Kerrville, Texas, Friday, July 11, 2025. (Ricardo B. Brazziell/Austin American-Statesman via AP)
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Trump Announces 30% Tariffs Against EU, Mexico to begin August 1

President Donald J. Trump speaks at a roundtable discussion at the Community Emergency Operations Center in Kerrville, Texas, Friday, July 11, 2025. (Ricardo B. Brazziell/Austin American-Statesman via AP)
President Donald J. Trump speaks at a roundtable discussion at the Community Emergency Operations Center in Kerrville, Texas, Friday, July 11, 2025. (Ricardo B. Brazziell/Austin American-Statesman via AP)

President Donald Trump on Saturday announced he's levying tariffs of 30% against the European Union and Mexico.

Trump announced the tariffs on two of the United States' biggest trade partners in letters posted to his social media account.

In his letter to Mexico's leader, Trump acknowledged that the country has been helpful in stemming the flow of undocumented migrants and fentanyl into the United States. But he said the country has not done enough to stop North America from turning into a “Narco-Trafficking Playground.”

“Mexico has been helping me secure the border, BUT, what Mexico has done, is not enough,” Trump added, The AP news reported.

Trump in his letter to the European Union said that the US trade deficit was a national security threat.

“We have had years to discuss our Trading Relationship with The European Union, and we have concluded we must move away from these long-term, large, and persistent, Trade Deficits, engendered by your Tariff, and Non-Tariff, Policies, and Trade Barriers,” Trump wrote in the letter to the EU. “Our relationship has been, unfortunately, far from Reciprocal.”

Trump is in the midst of an announcement blitz of new tariffs with allies and foes alike, a bedrock of his 2024 campaign that he said would set the foundation for reviving a US economy that he claims has been ripped off by other nations for decades.

With the reciprocal tariffs, Trump is effectively blowing up the rules governing world trade. For decades, the United States and most other countries abided by tariff rates set through a series of complex negotiations known as the Uruguay round. Countries could set their own tariffs – but under the “most favored nation’’ approach, they couldn’t charge one country more than they charged another.

With Saturday's letters, Trump has now issued tariff conditions on 24 countries and the 27-member European Union.

The European Union’s chief trade negotiator said earlier this week that a trade deal to avert higher tariffs on European goods imported to the US could be reached “even in the coming days.” Maroš Šefčovič told EU lawmakers in Strasbourg, France on Wednesday that the EU had been spared the increased tariffs contained in the letters Trump sent on Monday, and that an extension of talks would provide “additional space to reach a satisfactory conclusion.”

The bloc collectively sells more to the US than any other country. US goods imports from the EU topped $553 billion in 2022, according to the Office of the US Trade Representative.

Trump on April 2 proposed a 20% tariff for EU goods and then threatened to raise that to 50% after negotiations did not move as fast as he would have liked. Sefcovic did not mention any tariff figures.

The higher tariffs as well as any EU retaliation had been suspended as the two sides negotiate. However the base rate of 10% for most trade partners as well as higher rates of 25% on autos and 50% on steel and aluminum had gone into effect.

Douglas Holtz-Eakin, a former Congressional Budget Office director and president of the center-right American Action Forum, said the letters were evidence that serious trade talks were not taking place over the past three months. He stressed that nations were instead talking amongst themselves about how to minimize their own exposure to the US economy and Trump.

“They’re spending time talking to each other about what the future is going to look like, and we’re left out,” Holtz-Eakin said.

He added that Trump was using the letters to demand attention, but, “In the end, these are letters to other countries about taxes he’s going to levy on his citizens.”