CAIRO – The Central bank of Egypt (CBE) on Monday announced a decline in the unemployment rate from 6.9 percent in Q4 2023 to 6.4 percent in Q4 2024, marking a notable improvement in the labor market and the steady growth in creating job opportunities.
On an annual basis, the observed decrease in the unemployment rate was attributed to growth in employment by specific sectors, according to the CBE quarterly Monetary Policy Report (MPR).
All new entrants into the labor market were fully absorbed, thanks to the employment of these sectors. Employment in Q4 2024 was concentrated in trade, education, transportation, and manufacturing sectors, all of which continued to register robust growth rates over the same period, the report read.Real wages grew for the second consecutive quarter in Q4 2024 following a long contractionary spell since Q1 2021, as nominal wage growth outpaced inflation. However, the magnitude of the increase remains modest and hence, inflationary pressures emanating from the wage channel remain limited, especially as real wages remain below their trend. Hence, the current wage trajectory merely reflects a gradual recovery of purchasing power.
The resumption of the publication of the quarterly Monetary Policy Report (MPR) reaffirms the CBE’s commitment to clearing communication and transparency, as the MPR serves as the primary tool for explaining the rationale behind monetary policy decisions.The CBE recognizes the vital role of clear communication and policy transparency in anchoring inflation expectations around the target, which is essential for achieving its monetary policy objectives.
The Q1 2025 MPR provides economic analysis of actual developments since Q3 2021, covering global trends and domestic developments.
Specifically, the chapters of the MPR cover inflation; real, external, and monetary sectors; as well as domestic liquidity and financial conditions.The report also includes an expanded outlook section that aims to provide stakeholders with a clearer understanding of the CBE’s policy direction in the near and medium terms.It includes a forward-looking analysis of key macroeconomic variables, and an assessment of the risks surrounding the forecast trajectory, both of which are integral to the monetary policy decision-making process.In addition to resuming the publication of the MPR, the CBE is making significant progress to reinforce the pillars underpinning its inflation-targeting regime.
