Egypt registered a primary surplus of EGP98.5 billion ($5.23 billion) in the 2021/22 financial year to June 30, the country’s finance ministry said on Thursday.
The overall budget deficit stood at 6.1% of GDP, the statement added.
Meanwhile, Egypt’s annual urban consumer inflation slowed to 13.2% year-on-year in June from 13.5% in May, data from the state statistics agency CAPMAS showed on Thursday.
Month on month, headline inflation eased 0.1%, compared to a 1.1% increase in May.
The sharpest annual price increases were in the food and drink, recreation, and restaurant and hotel sectors, according to CAPMAS.
The agency attributed the decline to an 18.8% drop in vegetable prices, and a 10.5% drop in fruit prices. The broader food and beverage index recorded -2.2% yoy in the country as a whole, and -1.8% in the cities.
Egypt, one of the world’s biggest wheat importers, has been hit by the knock-on effect of global commodity price rises that accelerated with Russia's invasion of Ukraine, though the government has absorbed some of that impact.
It has been working to mitigate the war’s effect on the tourism sector, knowing that Russian and Ukrainian tourists represented almost one third of the total number of visitors.
The Central Bank targets an inflation rate between 5% and 9%, but it said when it raised interest rates by 200 basis points in May that it would temporarily tolerate inflation above that level.
The committee kept rates unchanged in June, and its next meeting is scheduled for Aug. 18.
“Prices are somewhat stable globally as oil prices saw a fall recently,” said Noaman Khalid, an economist at Arqaam Capital. “Also, there were no commodity price hike decisions from the Egyptian government.”
Inflation trends in coming months would depend on whether Egypt would need to allow commodity prices to rise under the terms of an expected deal with the International Monetary Fund (IMF), he said.
