The monthly inflation rate also inched up by 2.4 percent in March compared to February.
Egypt’s inflation accelerated amid the global inflationary wave that was first triggered by the Omicron wave of the pandemic and now the Russian-Ukrainian conflict.
CAPMAS explained that the increase in the annual headline inflation rate was mainly driven by the significant rise in food and beverage prices, which climbed by 33.2 percent, transportation by 6.5 percent, education by 13.9 percent, and entertainment and culture by 28.6 percent.
Moreover, it attributed the rise in the monthly inflation rate to the increase in the prices of food and beverages by 4.5 percent, entertainment and culture by 13.3 percent, and hotels and restaurants by 6.1 percent.
Furthermore, the country’s annual headline inflation has started to break the limit the Central Bank of Egypt (CBE) had set for it in 2022 at seven percent (±2 percent).
In early April, Fitch Solutions raised its projections for Egypt’s inflation in 2022 to 10 percent, up from the 7.1 percent it had projected in February, making it the third highest inflation rate in the region following Lebanon and Iran.
Responding to the pressures of the ongoing economic challenges, the government lowered its real GDP target for FY2022/23, which will begin in July, to 5.5 percent, down from 5.7 percent.
The government has recenty set fixed prices on unsubsidised bread - a key staple for Egyptians, in an effort to rein in inflation as the Russian-Ukrainian conflict disrupted wheat supply and pushed prices up globally.
Minister of Planning and Economic Development Hala El-Said said in March that the government plans to contain the inflationary wave by lowering its planned increase in public investment allocations to 15.2 percent, down from the 16.2 percent hoped for prior to the Russian-Ukrainian conflict.
In early March, to counter the pressure of the inflationary wave, the CBE’s Monetary Policy Committee hiked the key interest rates by one percent (100 bps) to preserve the gains achieved by the economic reform programme, particularly the improvement of the performance of macroeconomic indices.