Local experts expect annual inflation rates to soon hit 14 percent due to a recent rise in foodstuff prices by an average of 16.5 percent, according to a recent survey conducted by researchers at Cairo University.
One source at the Central Agency for Public Mobilization and Statistics said that most Egyptian families currently spend about 50 percent of their total income on food products. He went on to attribute rising inflation to soaring international gold prices.
Chamber of Egyptian Importers President Hamdi el-Naggar noted that average purchasing power had receded this year due to the rising prices of both local and imported foodstuffs.
"Production costs have gone up, which is why foodstuff prices have also skyrocketed–particularly in urban areas," he said. "Rising growth rates within the last three months have also contributed to the subsequent rise in food prices," added el-Naggar, who went on to criticize the government for inaccurately calculating current rates of inflation.
Local banking expert Ahmed Adam, for his part, expects interest rates to remain the same.
"The recent 3.25-percent interest-rate reduction had adverse repercussions on the market, with people tending to reduce their expenditures as a result of falling rates of interest on their time deposits," Adam said, contending that the move constituted a bid by the government to obtain bank loans at low interest against treasury bonds. "It’s better for the government to increase its resources than to reduce interest rates," he said.
Translated from the Arabic edition.
