Inflationary pressures easing in MENA region

Inflation is slowing down across MENA countries and should decelerate next year, Arab News quoted a report by Capital Economics.

The economic research company reached this conclusion after the PMI surveys for September revealed a fall in the output prices components in the region.

The Capital Economics noted the recent increase in inflation in the region was fuelled by transient factors such as rising food and energy prices.

It expects headline inflation to start decelerating in 2022/23 and the report said: “In Egypt, this should open the door for rate cuts to come back onto the agenda.”

The new PMI data bring good news for the region, as the non-oil sector rebounds in the Gulf countries in the short-term.

The elimination of pandemic-related restrictions and strong vaccination programmes will promote strong recoveries in the region, the Capital Economics said, pointing to Saudi Arabia and Qatar as evidence of strong vaccination programmes allowing the recovery of domestic activities.

However, Egypt is still at risk as new waves of the coronavirus and domestic restrictions remain a possibility due to weak vaccination rollouts.