Macro Snapshot — Egypt GDP topped 5% in Q1; countries hike interest rates to stabilize economies

RIYADH: Egypt’s economy grew more than 5 percent in the first quarter of 2022, CNBC Arabia reported on Monday, citing Planning Minister Hala Al-Saeed.

She also said the economy would grow around 6 percent in the 2021-22 fiscal year, which ends in June.

On the other hand, many countries are taking steps to stabilize their respective economies by hiking interest rates.

Ghana ramps up interest rate 

Ghana’s central bank on Monday raised its main interest rate by 200 basis points to 19 percent to curb inflationary pressures and promote macroeconomic stability, Gov. Ernest Addison said.

In March, the Bank of Ghana raised its policy rate by 250 basis points to 17 percent — the largest hike in its history — to stem runaway inflation in one of West Africa’s more prosperous nations as the government cut spending to reduce the budget deficit and save a sliding local currency.

But in April the consumer inflation rate in the gold, oil and cocoa producer hit an 18-year high of 23.6 percent. 

Pakistan hikes main policy rate 

The State Bank of Pakistan raised its benchmark interest rate on Monday by 150 basis points to 13.75 percent, the second hike in less than two months, as the South Asian nation grapples with a sinking economy.

The key interest rates have been hiked by 400 bps in less than two months, according to the central bank.

“This action, together with much needed fiscal consolidation, should help moderate demand to a more sustainable pace while keeping inflation expectations anchored and containing risks to external stability,” the bank said in a statement.

Swiss bank may tighten monetary policy 

The Swiss National Bank will tighten monetary policy if inflation in Switzerland remains persistently high, governing board member Andrea Maechler said in an interview published on Monday.

The European Central Bank on Monday became the latest institution to signal it was hiking rates to combat soaring inflation, following similar moves by the US Federal Reserve and the Bank of England. Read full story

The SNB could follow suit, should Swiss inflation remain outside its target range 0-2 percent. April saw the highest inflation rate in Switzerland for 14 years, with prices rising by 2.5 percent.

“If the inflation we expect does not come down in the medium term to a range between 0 percent and 2 percent, we will not hesitate to tighten policy,” Maechler told Swiss newspaper Bilan.

The SNB now has the world’s lowest interest rate of minus 0.75 percent which along with its readiness to intervene in the currency markets has been the basis of its monetary policy over the last seven years.

Nigeria Q1 GDP growth slows 

Nigerian gross domestic product grew 3.11 percent in the first quarter, slower than in the previous quarter as a fall in oil production hit the rest of the economy, the national statistics office said on Monday ahead of a central bank interest rate decision on Tuesday.

It was the sixth consecutive quarter of growth, with non-oil sectors helping Nigeria bounce back from a severe recession caused by the COVID-19 pandemic. The full-year GDP figure for 2021 showed the fastest growth in seven years. 

Gross domestic product grew by 3.98 percent in the fourth quarter of 2021. In the first three months of last year, the growth rate was 0.51 percent.

“After the recession experienced by the country in 2020 occasioned by the COVID-19 pandemic, the economy has been on the path of growth,” the National Bureau of Statistics said.