Inflation jumps In Hungary and Egypt
An inflation rate of 3%, for example, has the effect of a little tax on uninvested funds. Bank accounts will typically yield approximately 5% interest on savings. Also other assets will typically pay more if long-term inflation remains stable at about 3%. The economy benefits when people invest their money. Regarding the topic, it seems that some countries are having inflation problems.
Boosted by rising food and energy prices, Hungarian headline inflation increased to an annual 22.5% in November from 21.1% in October, while core of it increased to 24% from 22.3%, indicating robust pricing pressures in the economy.
According to Citigroup, the cap’s elimination had a one-time CPI impact of 2.9 percentage points, which increased the headline CPI in December and January to over 26% year over year.
On the plus side, eliminating the price ceiling could aid in reducing fuel use and help Hungary’s current account deficit close “said Citigroup in a note.
It stated that through July 2023. Experts thought that annual inflation would stay above 20%. The shock to fuel prices and indications of wage acceleration could increase the dangers of a second cycle of inflation. Limiting the NBH’s ability to lower rates, it added.
The National Bank of Hungary faces a struggle from unrelenting price increases after being compelled to raise interest rates in October to stop severe forint currency losses despite a weakening economy.
Consumer durables prices surged 14.4%, family energy costs increased 65.9% as the government cut back on utility bill subsidies, and food prices increased 43.8% year over year in November. Prices for services went up 9%.
Egypt’s inflation rises to 18.7%, a five-year high
With a tolerance range of one percentage point on either side, the central bank’s inflation target is 3%. According to figures released on Thursday by the statistics office CAPMAS, Egypt’s annual urban consumer inflation rate soared to a five-year high of 18.7% in November, almost meeting analyst estimates.
The inflation rate, which increased from 16.2% in October, was the highest since it reached 21.9% in December 2017. The currency devaluation in October and ongoing import restrictions were followed by price increases.
Inflation of 18.75% was the median prediction in a Reuters poll of 14 economists. Additionally, according to six economists, core inflation, which is scheduled to be released later on Thursday, would average 21.6%.
According to a note from Naeem Brokerage. The increase was due to a continuation of the month-over-month inflation spike. This with prices rising 2.3% as opposed to 2.6% in October. According to Naeem, supply shortages and increasing production expenses were the main factors behind the monthly increase.