CAIRO: Egypt’s yearly urban consumer inflation rate in March increased to 32.7 percent year-on-year, just shy of a record, from 31.9 percent in February, data from the country’s official statistical agency CAPMAS showed.
On month-on-month basis, urban inflation reduced to 2.7 percent in March from 6.5 percent in February after rising from 4.7 percent in January.
Egypt’s surging inflation rate follows a series of currency devaluations starting in March 2022, the prolonged shortage of foreign currency, and regular delays in getting imports into Egypt.
Egypt, which secured a three-billion-dollar financial support package from the International Monetary Fund (IMF) in December, has devalued its national currency by half since March 2022 after the fallout from Russia’s/Ukraine war exposed vulnerabilities in its economy.
Despite a slowdown in month-on-month inflation, it remained among the highest readings on record.
Factors behind the rise in inflation
The rise in inflation was driven by increased food prices linked to Ramzan-related high seasonal demand, the impact of currency devaluation, particularly in the informal market, and the effect of the raw material shortage, Naeem Brokerage said in a statement.
The median of 13 analysts forecast polled showed annual urban consumer inflation increasing to 33.6% in March.
Egypt’s highest inflation rate ever was 32.952 percent, recorded in July 2017, eight months after the country devalued its currency by half as part of the previous $12 billion IMF support package.
The core inflation rate, which excludes fuel and a few volatile food goods, fell back to 39.5 percent after jumping to a record 40.26 percent in February, central bank data showed. The median of the analysts’ forecasts expected it to climb to 42.25 percent.
