Egypt’s inflation rate hits record 2nd month in a row

PHOTO
This picture taken on August 1, 2023 shows the interior of the new headquarters for the House of Representatives, the lower house of the Egyptian Parliament, at the New Administrative Capital megaproject about 45 kilometres east of the current capital Cairo. (Photo by Khaled DESOUKI / AFP). Agence France-Presse (AFP) Image for illustrative purpose.

Egypt’s annual urban inflation rate rose to an all-time high of 36.5% in July, up from 14.6% in the same month a year earlier, the country’s Central Agency for Public Mobilization and Statistics (CAPMAS) announced Thursday.

The record year-on-year increase was mostly driven by price hikes of grains, hotels, alcohol and cigarettes, and healthcare. Food and drink prices registered a 68.2% increase compared to that of July 2022, the CAPMAS said in a statement.

The previous record of annual inflation rate rise was registered last month at 35.7%.

Meanwhile, Egypt’s annual core inflation inched down slightly to 40.7% in July down from 41% in June, according to the Central Bank of Egypt.

Egypt’s price hikes persisted even after the local currency’s value against the dollar fell by half since March 2022. The devaluation of the currency has led to a foreign currency shortage and delays in import delivery.

Floating the Egyptian pound is part of the economic and structural reforms demanded by the International Monetary Fund (IMF) for securing loans.

In December 2022, Egypt received a $3bn financial support package from the IMF.