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Egypt’s inflation hits 37.4% on rising food prices

Tunisia Reuters/Jihed Abidellaoui
Vegetable prices rose 21.6 percent month on month in August 2023

Egypt’s annual urban consumer price inflation rate surged to a higher-than-expected record 37.4 percent in August from 36.5 percent in July, data from the country’s statistics agency Capmas showed on Sunday.

Headline inflation in July was 36.5 percent and in June 35.7 percent, both also all-time highs.

High money supply growth over the last two years has led prices to climb rapidly and triggered three devaluations since March 2022. Many Egyptians have seen their living standards slide.

Core inflation, which strips out volatile items like food and fuel, eased slightly to 40.4 percent from 40.7 percent in July and 41 percent in June, the central bank said.

Month-on-month, prices rose 1.6 percent in August, down from 1.9 percent in July and 2.08 percent in June, Capmas said.

Analysts said the gradual month-on-month decline could be a positive sign.

“It is tentatively a sign that prices are consolidating at these levels,” said Allen Sandeep at Naeem Brokerage.

These included a 21.6 percent month-on-month increase in vegetable prices and a 5.8 percent increase in tobacco product prices, while meat fell 2.5 percent and bread and cereals 1.1 percent, according to analysts.

The median forecast of 14 analysts polled last week had shown annual urban consumer inflation rising to 37.1 percent in August. The previous high of 32.95 percent was recorded in July 2017.