Video|12 September 2024

MENA -Egypt Faces Inflation Surge, While Turkey Secures Credit Upgrade

Egypt’s inflation unexpectedly rose to 26.2% in August after five months of easing. The rise was driven by transportation prices which surged following cuts to fuel subsidies. We think the recent electricity price hikes will sustain upward pressure on inflation in the near-term, but still see it closing the year near 24%. The rise in inflation strengthens the odds that the central bank of Egypt will keep interest rates on hold until Q1 2025.

Turkey landed its fourth credit rating upgrade and the second one from Fitch this year. The agency raised Turkey’s rating to BB- from B+, with a stable outlook, commending the improvement in the policy direction. Fitch’s decision leaves the rating one notch above that of Moody’s and S&P. That said, both hold a positive outlook on their ratings, pointing to further upgrades if policy orthodoxy prevails.

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