every Egyptian's nightmare?
We're constantly hearing phrases like "inflation rate has gone up" or "the Dollar price in the black market is now 50 EGP"... We talk about how everything has become more expensive and fear it'll get worse..
Will inflation get better? When will Egypt’s economy improve? How can Egypt’s economy improve? What’s today’s Dollar price to EGP? These questions represent some of the most troubling thoughts every Egyptian has been learning to live with. At Flash, we’re tirelessly working to achieve our vision of supporting our society’s financial wellbeing, one person at a time. We believe that one of the best ways for our society to deal with increasing inflation rates and economic instability is to educate ourselves on the matter so that we’re able to build financial and emotional resilience during these tough economic times - key factors for us to be able to make informed, or at the very least better, decisions.
In this blog post we will take a look at inflation and currency devaluation, their causes, how they impact the Egyptian economy and, in turn, our mental, emotional and financial wellbeing. We also share measures we could take as individuals to safeguard ourselves and our money’s value during these times.
The currency exchange rate is the rate at which one currency will be exchanged for another currency. It affects trade, the movement of money between countries and production costs, in turn influencing the prices of goods and services. The currency exchange rate can serve as an indicator of a country’s economic health as well as influence its inflation rates.
Besides being every Egyptian’s nightmare and a major source of stress, inflation refers to a general increase in prices and fall in the purchasing value of money. Let’s take a look at Egypt’s inflation rate in numbers: the rate in November 2023 is 35%, which means that if, on average, a good or service cost you 100 EGP in November 2022, it now costs you 135 EGP in November 2023. Now let’s continue on this same example to see how inflation can accumulate over the years. For the sake of explanation, we will assume that the inflation rate remains as it is at 35% (which isn’t usually the case, inflation rates tend to change from one year to another depending on various circumstances). The same basket of groceries that cost you 100 EGP in 2022, will cost you 135 EGP in 2023, 182 EGP in 2024 and 246 EGP in 2025. This increase means that the purchasing power of your money has decreased - for the same amount you can now afford less items. This is how inflation erodes the value of your money..
But don’t get discouraged by that. The first step to improve our financial circumstances is to understand our situation and why we are in it… That being said, let’s dive a bit deeper and talk about the types of inflation prevalent in Egypt.
Want to know more?
In the next blog post we will discuss and explain the major types of inflation currently in Egypt and how inflation and currency exchange rate are affecting Egyptians and shaping their lives.
