Egypt inflation hits all-time high in June, reaching 36.8%

Doaa A.Moneim , Monday 10 Jul 2023

Egypt's headline inflation maintained its upward trend in June, reaching 36.8 percent, compared to 34.8 percent in May, as announced by the Central Agency for Public Mobilization and Statistics (CAPMAS) on Monday.

File Photo: People walk past a fruit seller s stall in the Azhar district of Egypt s capital Cairo on January 16, 2023. AFP


The June reading represents a two percent increase compared to the previous month. It is also more than double the inflation rate recorded in June 2022, which stood at 14.7 percent.

CAPMAS attributed this significant increase primarily to the rise in prices of foodstuff and beverages, which increased by 1.5 percent on a monthly basis and 64.9 percent on an annual basis in June.

In line with Egypt's commitments under its $3 billion loan deal with the International Monetary Fund (IMF), which was approved in December, the Central Bank of Egypt (CBE) has set two targets for inflation.

The targets aim to achieve an average inflation rate of seven percent (± 2 percent) by the fourth quarter of 2024 and five percent (± 2 percent) by the fourth quarter of 2026.

However, the IMF loan deal is currently facing challenges. The first review, originally scheduled to be completed on 15 March, has not yet made progress.

In its last meeting held in June, the CBE kept key interest rates unchanged. Under the IMF deal, Egypt is committed to implementing a flexible interest rate regime with the key objective of curbing high inflation.

The CBE’s next meeting is scheduled for 3 August, marking the first meeting of the fiscal year 2023/2024, which started on 1 July.

In a bid to contain the inflationary wave that began in March 2022 due to the conflict in Ukraine, the CBE has raised interest rates by a total of 10 percent (1000 basis points), with five percent of the increase implemented since the beginning of 2023.

Short link: