In September, Egypt experienced a historic high in annual urban consumer price inflation, reaching 38.0%, up from the 37.4% recorded in August, surpassing the expectations of analysts.
According to the country’s statistics agency CAPMAS this marks the fourth consecutive month of record-high inflation figures, as reported on the central bank website, which maintains data dating back to 2000.
Before the release of this data, a median forecast from a poll of 18 analysts had indicated that annual urban consumer inflation was expected to rise to 37.6% in September.
Before inflation surged in June, the previous high was recorded at 32.95% in July 2017.
On a monthly basis, inflation also picked up speed, with prices rising by 2.0% compared to a 1.6% increase in August, according to Allen Sandeep of Naeem Brokerage. This marked the fastest pace of increase since June, Reuters reported.
Within the category of food and beverages, there were significant month-on-month increases, with vegetable prices surging by 19.2%, fruits by 5.4%, dairy products by 5.4%, and sugar items by 2.9%, as highlighted by Sandeep.
To combat food inflation, the government announced on Monday that it had reached an agreement with private producers and retailers to reduce prices on essential foods by 15-25% and exempt them from customs duties for six months.
The rapid money supply growth over the past two years has contributed to a swift increase in prices and has led to the Egyptian pound losing half its value against the US dollar since early last year.
This steep rise in prices has now added to the burden of families who have been struggling to make ends meet.
The economic crisis in this import-dependent nation was triggered by Russia’s invasion of Ukraine which disrupted vital food supplies and created instability in global markets.
Before the current crisis, the World Bank reported that 30 per cent of Egyptians were already living below the poverty line, and an additional 30 per cent were at risk of slipping into poverty.
Egypt, the most populous country in the Arab world, has relied on financial assistance in recent years, receiving bailouts from both Gulf allies and the International Monetary Fund (IMF).
Last year, the IMF granted Egypt a $3 billion loan, contingent upon the country adopting a permanent shift to a flexible exchange rate regime.
Egypt’s external debt has tripled over the past decade, reaching an all-time high of $165.4 billion this year, as reported by the Ministry of Planning.
Source: Norvanreports