The economic situation in Egypt is deteriorating rapidly amid the Israel-Gaza conflict and domestic policy challenges. Steve Hanke, an economist known for measuring inflation in crisis-hit countries, reports a staggering 128% annual inflation rate in Egypt and 122% in Syria. The Egyptian pound has also suffered a significant devaluation, depreciating over 63% against the US dollar since the approval of Egypt's 12th IMF program on December 16, 2022. In the black market, the currency is already implying a 50% devaluation against the official rate. The parallel market shows the currency plunging to a new low of 72 pounds to the dollar, far below the official rate of around 31 pounds. Additionally, the Central Bank of Egypt's confirmation of a 19.92% growth in the money supply (M2) in 2023, which exceeds Hanke's Golden Growth Rate for maintaining Egypt's inflation target, indicates a lack of control over inflation. The situation echoes past economic crises that have led to political unrest, as rising bread prices and other economic pressures have historically fueled public discontent.
Support for Egypt’s army has faded since 2011, when it allowed a revolution to topple Hosni Mubarak. Then, as now, rising bread prices fuelled anger. But the economic crisis is far worse today https://t.co/3xMT7auzjW 👇
#EgyptWatch🇪🇬: NO MONEY SUPPLY CONTROL = NO INFLATION CONTROL. The Central Bank of Egypt confirmed the money supply (M2) grew 19.92% in 2023. That's way above Hanke's Golden Growth Rate of 7.3-11.3%, a rate consistent with hitting Egypt’s 5%/yr – 9%/yr inflation target. No…
Egypt's currency plunged this week to an unprecedented low of 72 pounds to the dollar in the parallel market. That rate is significantly below the official exchange rate, which stood at around 31. https://t.co/oLZsDLmfBf
#EgyptWatch🇪🇬: The Egyptian pound has depreciated by over 63% vs the USD since the approval of Egypt's 12th IMF program on 12/16/22. The IMF will not be Egypt’s savior. Only a currency board would save the pound. https://t.co/bX4Y9ejOHK
#EgyptWatch🇪🇬: Pres. Sisi's INCOMPETENCE + Israel-Gaza COLLATERAL DAMAGE = BIG ECONOMIC TROUBLES IN EGYPT. Today, I measure inflation in Egypt at a PUNISHING 128%/yr https://t.co/19XNjkjLAI
Remember Egypt has officially pegged currency to US$. Black market already implying 50% deval vs official rate https://t.co/1h8H7TMDLj https://t.co/NSDcVxruwK
ISRAEL-GAZA WAR = MASSIVE COLLATERAL DAMAGE Exhibit A: Today, I measure inflation in Syria – where I’m the only one measuring inflation – at a SKY-HIGH 122%/yr. https://t.co/YwmGxBGQUI