Egypt’s Headline Inflation Surges to 25.8% In January amid Imports Delay

Two Egyptian women shopping in a supermarket in Cairo, Egypt, December 1, 2019. REUTERS/Shokry Hussien/Files
Two Egyptian women shopping in a supermarket in Cairo, Egypt, December 1, 2019. REUTERS/Shokry Hussien/Files
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Egypt’s Headline Inflation Surges to 25.8% In January amid Imports Delay

Two Egyptian women shopping in a supermarket in Cairo, Egypt, December 1, 2019. REUTERS/Shokry Hussien/Files
Two Egyptian women shopping in a supermarket in Cairo, Egypt, December 1, 2019. REUTERS/Shokry Hussien/Files

Egypt's annual urban consumer price inflation jumped to a higher-than-expected 25.8% in January, data from statistics agency CAPMAS showed on Thursday.

The rise from 21.3% in December followed a series of currency devaluations starting in March 2022, a prolonged shortage of foreign currency, and continuing delays in getting imports into the country. The Egyptian pound has fallen by nearly 50% since March.

January inflation was the highest since December 2017, a year after a steep devaluation.

Economists had expected a reading of 23.75%, according to the median forecast in a Reuters poll of 14.

Five analysts had forecast that core inflation would climb to 26.6% from 24.4% in December.

Core inflation jumped to 31.241% in January from 24.449% in December.

Headline inflation increased across the board, but was driven especially by higher prices of food and non-alcoholic beverages, which make up 32.7% of the index's basket, "as producers continued to pass through higher import bills to shoppers", said Allen Sandeep of Naeem Brokerage.

Month-on-month, prices rose by 4.7% compared to 2.1% in December, driven by a 10.1% monthly surge in food and beverage prices, Sandeep said.

The high January number increases pressure on the central bank's Monetary Policy Committee (MPC) to raise interest rates when it next meets on March 30.

At its last meeting on Feb. 2, the MPC kept its lending rate at 17.25% and the deposit rate at 16.25%, saying its hikes of 800 basis points over the last year should help to tame inflation.



Saudi PIF Invests $200 Million in ETF Bond Fund

The fund is the first of its kind in Saudi Arabia to focus on fixed-income exchange-traded funds (ETFs). (Asharq Al-Awsat)
The fund is the first of its kind in Saudi Arabia to focus on fixed-income exchange-traded funds (ETFs). (Asharq Al-Awsat)
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Saudi PIF Invests $200 Million in ETF Bond Fund

The fund is the first of its kind in Saudi Arabia to focus on fixed-income exchange-traded funds (ETFs). (Asharq Al-Awsat)
The fund is the first of its kind in Saudi Arabia to focus on fixed-income exchange-traded funds (ETFs). (Asharq Al-Awsat)

State Street Global Advisors, a subsidiary of State Street Corporation, announced that Saudi Arabia’s Public Investment Fund (PIF) has invested SAR 750 million ($200 million) in the newly launched SPDR J.P. Morgan Saudi Aggregate Bond ETF.

According to a statement released by the company on Wednesday, this fund is the first of its kind in Saudi Arabia to focus on fixed-income exchange-traded funds (ETFs). It is listed in both the London Stock Exchange and Germany’s Xetra, offering investors the opportunity to track government and quasi-government bonds denominated in either the Saudi Riyal or the US Dollar, including sukuk (Islamic bonds).

This investment aligns with the objectives of Saudi Vision 2030, representing a significant step toward enhancing the international presence of Saudi Arabia’s financial markets and attracting foreign investments. The fund is available to investors across several European countries, including Austria, Denmark, France, Germany, and Italy.

Commenting on the investment, Yazid Al-Humaid, Deputy Governor and Head of MENA Investments at PIF, said: “The fund continues to create opportunities and enable access to diverse capital markets in the Kingdom. Investing in the first internationally listed Saudi fixed-income ETF underscores PIF’s commitment to deepening Saudi capital markets, attracting investors, and fostering partnerships across global financial centers.”

CEO of State Street Global Advisors Yi-Hsin Hung emphasized that the launch of the fund is a significant milestone in providing innovative opportunities for investors while contributing to Saudi Arabia’s economic growth.