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Egypt inflation rises to 5-year high of 18.7% in November 2022

Egypt Reuters/Shokry Hussien
Egypt still has a severe shortage of foreign currency despite a 14.5 percent devaluation of its currency in October

Egypt’s annual urban consumer inflation rate surged to a five-year high of 18.7 percent in November, closely matching analyst expectations, data from the statistics agency CAPMAS showed on Thursday.

The inflation figure, up from 16.2 percent in October, was the highest since December 2017, when it hit 21.9 percent. The price rises followed a currency devaluation in October and continued restrictions on imports.

The median forecast in a Reuters poll of 14 economists had expected inflation of 18.75 percent. Six economists also forecast that core inflation, due out later on Thursday, would come in at a median 21.6 percent.

The increase reflected a continued jump in month-on-month inflation, with prices rising 2.3 percent compared to 2.6 percent in October, Naeem Brokerage said in a note.

The monthly increase was “as driven by higher production costs, amid a weakening Egyptian pound, in addition to supply shortages,” Naeem wrote.

Egypt’s non-oil private sector also shrank in November at its sharpest rate since the outbreak of the coronavirus pandemic in early 2020, with a weaker currency weighing on the cost and the availability of foreign goods, a S&P Global survey showed.

The country has been suffering a severe shortage of foreign currency despite a 14.5 percent devaluation on October 27 and the announcement of a $3 billion support package with the International Monetary Fund. The lack of dollars has tightened the flow of imports for factory and retail inputs.