What does inflation mean? Why do the prices of things we buy every day, such as vegetables and meat, keep rising without stopping? What makes the prices of gasoline, livelihood and goods that we depend on daily increase in this way? What is the role of the government and the central bank in controlling the situation?
Inflation simply means that prices increase over time and the value of the money in your pocket decreases over time.. I mean, the 100 pounds that used to bring a few things in the past now brings much fewer things.. and this does not affect one person or family only, no! This affects the entire economy… and we all feel it
According to data from the Central Bureau of Statistics, annual inflation in Egyptian cities reached 26.5% in October, and this is considered a slight increase from the previous month, which was 26.4%. This increase occurred due to an increase in fuel prices by 9.2%… and this was part of the government’s plan, which took place for years, to reduce subsidies and improve the financial situation.
But this inflation is not only due to gasoline prices! There is a significant increase in the prices of basic needs such as bread, which increased by 36.7%, and meat and poultry by 19.7%. Even the fruits and vegetables that we buy every day, the increase in their prices reached 28.5% and 39.1%, respectively.
Many people ask: Why does the government increase gasoline prices and reduce subsidies?
Frankly, support is very expensive, and Egypt is trying to reduce the burden on the state budget so that it can invest in other needs, such as education and health.
The question remains that everyone wants to know the answer to: What are the government and the central bank doing to control this inflation?
The government is taking many steps, not only regarding the issue of raising prices, but it is also trying to obtain loans from international institutions such as the International Monetary Fund, which visited Egypt last week. This is in an attempt to obtain financial support to help relieve the economic pressure on the people
As for the Central Bank, it uses various tools, such as raising interest rates, which leaves the interest rate now at 27.25%, and this is the highest level in five consecutive meetings of the bank. The goal of raising the interest rate is to reduce the demand for goods and services somewhat, and thus slow down the speed of price increases
Current expectations say that inflation in Egypt could decline to 20.4% in the fiscal year 2024-2025, and 11.4% in 2025-2026. I mean, there is hope that the situation will improve a little, but this of course depends on many factors.
But as we see, the matter is not easy… The economic pressure is great, and the effects of regional tensions around us, such as what is happening in the Red Sea, which affects the revenues of the Suez Canal, add other burdens to the government.
In the end, inflation is a problem that we all must understand because it affects the lives of every citizen in Egypt, and the government and the Central Bank are trying as much as possible to control it… but of course the challenge is great, and what is required of us is that we be aware and follow the news around us in order to understand the complete picture.
