The CBE also noted that real GDP saw growth of 2.9 percent during the first quarter of 2021, up from 2 percent recorded in the fourth quarter of 2020
For the fifth time in a row, the Central Bank of Egypt’s Monetary Policy Committee (MPC) has elected to keep the overnight deposit rate, overnight lending rate, and the rate of the main operation unchanged at 8.25 percent, 9.25 percent, and 8.75 percent respectively for the fourth time in 2021.
The discount rate was also kept unchanged at 8.75 percent.
The CBE also noted that real GDP saw growth of 2.9 percent during the first quarter of 2021, up from 2 percent recorded in the fourth quarter of 2020.
The committee announced that their decision came from recent annual headline urban inflation readings, which increased to 4.8 percent in May 2021, from 4.1 percent in April, after having decelerated from 4.5 percent in March 2021.
Annual headline inflation rates saw mixed base effects during April and May 2021, said the MPC, showcasing the early impact of the outbreak of COVID-19 and its related containment measures on inflation readings during 2020.
The central bank also expects inflation rates to continue to be affected by unfavorable base effects in the near term.
According to the CBE, Q4 2020 showed that growth continues to be supported by a robust positive consumption contribution, and in particular private consumption.
Sectoral GDP growth was supported by the positive contributions of trade, construction and communication, while tourism and non-petroleum manufacturing continue to weigh down on growth despite their recent pick-up, according to the CBE.
“Furthermore, leading indicators point towards a sustained momentum of recovery across the board,” CBE explained.
On the global level, the CBE noted that economic activity continues to recover from the COVID-19 pandemic, although growth remains uneven across regions, as some countries are yet to contain the spread of the virus.
Prospects for global economic recovery remain contingent on the scale of distribution, as well as the efficacy of vaccines, according to the CBE.
It added that global financial conditions are also anticipated to remain accommodative and supportive of economic activity over the medium term.