Egypt is currently grappling with an escalating economic crisis. Egypt’s annual urban inflation rate surged to 35.7% in June 2023. While the national currency continues to depreciate.
The surge in inflation has resulted in soaring prices for essential goods and services across the nation. According to the Egyptian Statistics Bureau, the annual inflation rate reached 36.8% in June, marking a staggering 33.7% increase from the previous month.
The Egyptian pound (EGP) has also experienced a depreciation in value against the U.S. dollar this year, further exacerbating the economic difficulties. The currency’s worth has already decreased by approximately 20% in 2023 alone. These devaluations have worsened the economic situation, pushing Egypt’s inflation rate to its highest level since 1958.
Government Implements Measures to Tackle Economic Crisis
Amidst the mounting inflation crisis and decreasing budgetary allocations, efforts to combat these challenges have been made. However, despite these actions, the exchange rate of Bitcoin against the Egyptian pound (EGP) indicates that the cryptocurrency is approaching a record high. Currently, the exchange rate stands at an impressive 936,506 EGP per Bitcoin, inching closer to the all-time high achieved in November 2021 when BTC surpassed one million EGP per unit.
The combination of spiraling inflation and currency depreciation has had a devastating impact on Egyptian citizens. Some households are now struggling to afford basic necessities, leading to concerns of food shortages and increased financial strain. Recognizing the urgent need for assistance, the government announced a plan on January 16, 2023, to provide discounted bread to low-income Egyptians who have been most affected by the ongoing economic crisis.
Official government statistics reveal that nearly 30% of the Egyptian population currently live below the poverty line, highlighting the urgent need for support and intervention.
In response, Egyptian policymakers have sought assistance from international organizations such as the International Monetary Fund (IMF) and the World Bank. Throughout the years, Egypt has received multiple financial support packages from the IMF, including a recent $3 billion loan approved in December 2022.
As Egypt grapples with surging inflation, currency depreciation, and the imminent rise of Bitcoin to its all-time high, swift and consistent action will be necessary to navigate these challenging times and restore financial stability to the country.