Inflation in Egypt hits all-time high of 39.7% in August: CAPMAS

Doaa A.Moneim , Sunday 10 Sep 2023

Egypt’s annual headline inflation hit a record high of 39.7 percent in August, up from 38.2 percent in July, according to figures released by the Central Agency for Public Mobilization and Statistics (CAPMAS) on Sunday.

File photo: Women shopping in a supermarket in Cairo, Egypt. REUTERS


Meanwhile, the country’s headline monthly inflation also jumped by 1.6 percent in August compared to the level reached in July.

These readings are well beyond the Central Bank of Egypt (CBE) targets of seven percent (±2 percent) through the fourth quarter of 2024.

CAPMAS attributed the jump in annual headline inflation to the significant rise in prices of food and beverages (by 71.9 percent), restaurant and hotel services (by 49.5 percent), and transportation (by 15.2 percent).

The increase in monthly inflation can be attributed to the rise in prices of food and beverages (by 2.2 percent), clothes and shoes (by 23.6 percent), and healthcare services (by 22.8 percent), according to CAPMAS.

In July, Egypt's annual core inflation rate recorded 40.7 percent.

Monetary policy goals

Taming inflation has been the key objective of monetary policy of the CBE in recent months and remains a key commitment by the country to the International Monetary Fund under its $3 billion four-year loan deal approved in December of 2022.

Inflation in the country has maintained an upward trajectory since the start of the war in Ukraine in the winter of 2022.

The figure for annual headline inflation in August of 2022 was 15.3 percent.

In August, the CBE raised Egypt’s key interest rates in August by one percent. It also raised the overnight deposit rate, overnight lending rate, and the rate of main operations to 19.25 percent, 20.25 percent, and 19.75 percent, respectively.

Since March 2022, the Monetary Policy Committee (MPC) of the CBE has raised key interest rates by a total of 11 percent.

The MPC is scheduled to convene again on 21 September to review interest rates.

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