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Egypt Inflation Soars to 5-year High

Egypt's official annual headline inflation rate leaped to 31.9 percent in February. (AP)
Egypt's official annual headline inflation rate leaped to 31.9 percent in February. (AP)
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Egypt Inflation Soars to 5-year High

Egypt's official annual headline inflation rate leaped to 31.9 percent in February. (AP)
Egypt's official annual headline inflation rate leaped to 31.9 percent in February. (AP)

Egypt's official annual headline inflation rate leaped to 31.9 percent in February from 25.8 percent in January, its highest in five and a half years, according to official data published by statistics agency CAPMAS on Thursday.

The government, meanwhile, has declared that the state is ready to provide new "support packages” to the people.

The soaring inflation follows a series of currency devaluations starting in March 2022, a prolonged shortage of foreign currency, and a continuing backlog of getting imports out of ports.

The Egyptian pound has fallen by nearly 50 percent since March 2022.

Economists had expected a reading of 26.7 percent, according to the median forecast in a Reuters poll of 14.

Six analysts had forecast February core inflation of 32.85 percent.

Mounting inflation could put pressure on the central bank's Monetary Policy Committee to raise interest rates when it next meets on March 30.

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

Prime Minister Mostafa Madbouly said that the recently announced social support package by President Abdel Fattah al-Sisi is “the biggest in the history of the country”.

Sisi urged at the beginning of this month the government to prepare a package to raise state and private wages and pensions, starting from April, by a minimum of 1,000 Egyptian pounds, as well as a 15 percent increase in pensions, and increasing the tax exemption allowance on annual income to 30,000 pounds from 24,000 pounds.

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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)

Telecommunications companies listed on the Saudi Stock Exchange (Tadawul) achieved a 12.46 percent growth in their net profits, which reached SAR 4.07 billion ($1.09 billion) during the second quarter of 2024, compared to SAR 3.62 billion ($965 million) during the same period last year.

They also recorded a 4.76 percent growth in revenues during the same quarter, after achieving sales worth more than SAR 26.18 billion ($7 billion), compared to SAR 24.99 billion ($6.66 billion) in the same quarter of 2023.

The growth in the revenues and net profitability is the result of several factors, including the increase in sales volume and revenues, especially in the business sector and fifth generation services, as well as the decrease in operating expenses and the focus on improving operational efficiency, controlling costs, and moving towards investment in infrastructure.

The sector comprises four companies, three of which conclude their fiscal year in December: Saudi Telecom Company (STC), Mobily, and Zain Saudi Arabia. The fiscal year of Etihad Atheeb Telecommunications Company (GO) ends on March 31.

According to its financial results announced on Tadawul, Etihad Etisalat Company (Mobily) achieved a 33 percent growth rate of profits, bringing its profits to SAR 661 million by the end of the second quarter of 2024, compared to SAR 497 million during the same period in 2023. The company also achieved a 4.59 percent growth in revenues to reach SAR 4.47 billion, compared to SAR 4.27 billion in the same quarter of last year.

The Saudi Telecom Company achieved the highest net profits among the sector’s companies, at about SAR 3.304 billion in the second quarter of 2024, compared to SAR 3.008 billion in the same quarter of 2023. The company registered a growth of 4.52 percent in revenues.

On the other hand, the revenues of the Saudi Mobile Telecommunications Company (Zain Saudi Arabia) increased by about 6.69 percent, as it recorded SAR 2.55 billion during the second quarter of 2024, compared to SAR 2.39 billion in the same period last year.

Commenting on the quarterly results of the sector’s companies, and the varying net profits, the head of asset management at Rassanah Capital, Thamer Al-Saeed, told Asharq Al-Awsat that the Saudi Telecom Company remains the sector leader in terms of customer base expansion.

He also noted the continued efforts of Mobily and Zain to offer many diverse products and other services.

Financial advisor at the Arab Trader Mohammed Al-Maymouni said the financial results of telecom sector companies have maintained a steady growth, up to 12 percent, adding that Mobily witnessed strong progress compared to the rest of the companies, despite the great competition which affected its revenues.

He added that Zain was moving at a good pace and its revenues have improved during the second quarter of 2024. However, its profits were affected by an increase in the financing cost by SAR 26.5 million riyals and a rise in interest, while net income declined significantly compared to the previous year, during which the company made exceptional returns.