Egypt’s annual inflation jumps to 8%, monthly rate inches up by 1%: CAPMAS

Doaa A.Moneim , Thursday 10 Feb 2022

Egypt’s annual headline inflation hiked approximately two-fold in January to eight percent, up from 4.8 percent in January 2021, the Central Agency for Public Mobilisation and Statistics (CAPMAS) reported on Thursday.

inflation
Tawfiqiya shopping market in downtown Cairo. Ahram Online

The monthly headline inflation rate increased by one percent in January. The raise is the first since October.

Egypt’s monthly headline inflation witnessed a slight decline in December, reaching 5.4 percent, down from 5.6 percent in November and 6.3 percent in October, according to CAPMAS.

The annual and monthly inflation readings are below the Central Bank of Egypt’s (CBE) target of seven percent (±2 percent) through the end of 2022.

CAPMAS attributed the rise in the annual inflation rate to the notable increase in the prices of food and beverages by 14 percent, education services by 13.1 percent, and water, natural gas, housing, fuel and electricity by five percent.

The rise in the monthly inflation rate was fuelled mainly by the increase in the prices of food and beverages by 2.6 percent. The prices of other goods edged up by between 0.1 percent and 0.8 percent, according to CAPMAS.

Meanwhile, the CBE announced on Thursday its calculations of the annual and monthly inflation rates in Egypt.

Egypt’s annual headline inflation rate jumped to 7.3 percent in January, up from 5.9 percent in December 2021. The monthly core inflation inched up to 0.8 percent in January, up from 0.5 percent in the corresponding month of 2021 and 0.2 percent in December.

Consequently, the annual core inflation rate increased to 6.3 percent in January, up from six percent in December 2021, according to the CBE.

Based on December's inflation figures, the CBE’s Monetary Policy Committee (MPC) decided to maintain the current interest rates at the December 2020 level in its meeting held on 3 February, the first in 2022.

The MPC kept the overnight deposit rate, overnight lending rate, the rate of the main operation, and the discount rate unchanged at 8.25 percent, 9.25 percent, 8.75 percent and 8.75 percent, respectively.

The CBE said that Egypt’s economic activity continued its robust recovery in the third quarter of 2021, recording a preliminary rate of 9.8 percent in real GDP growth, which is the highest rate to reach since 2001.

Growth on an annual basis benefited from this rebound compared to the corresponding period of 2020, which witnessed the gradual lifting of COVID-19 containment measures, according to the CBE.

The CBE expects Egypt’s economic activity to continue to grow over the near-term, driven by domestic demand and gross domestic investments.

“Leading indicators point towards a continued expansion across most economic sectors,” said the CBE.

 

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