“As a result of the pandemic and its related impacts, the cost of shipping a container on the world’s transoceanic trade routes increased seven-fold in the 18 months following March 2020, while the cost of shipping bulk commodities spiked even more,” according to the IMF’s research.

The research showed that the inflationary impact of these higher costs is poised to increase by the end of this year, adding that the war in Ukraine is predicted to exacerbate global inflation.

The IMF’s findings indicated that increasing shipping costs affect inflation in some countries more than others, as “countries that import more of what they consume see larger increases in inflation, as do those who are more integrated into global supply chains. Similarly, countries that typically pay higher freight costs —landlocked countries, low-income countries, and especially island states — see more inflation when prices rise.”

As per the recent announced figures, Egypt’s annual headline inflation climbed in February to 10 percent, up from the eight percent recorded in January, which surpassed the inflation ceiling set by the Central Bank of Egypt (CBE) at 7 percent (±2 percent) by the end of 2022.

In light of this and the ongoing economic challenges, the CBE hiked its key interest rates in March by one percent (100bps) for depositing and lending, following the interest rate hikes applied in all banks globally, chiefly the US Federal Reserve.