Egypt’s inflation expedites rising food and energy’s prices by Ukrainian war

Egypt’s headline annual inflation rate expedited to 14.9 percent in April, up from the 12.1 percent reported in March and 4.4 percent in the corresponding month in 2021, the Central Agency for Public Mobilisation and Statistics (CAPMAS) announced on Tuesday.

At the same time, inflation in urban areas risen 13.1 percent, according to CAPMAS. Monthly headline inflation also jumped at 3.7 percent in April, driven by the rising prices of food commodities and services.

Prices of food and beverages rose 8.1 percent in April; clothes and shoes by 3.8 percent, housing, electricity, and gas by 1.1 percent, accordingly, CAPMAS data showed.

According to data based on an annual basis, food and beverage prices increased remarkably 29.3 per cent, transportation – 6.9 percent, and healthcare – 4.5 percent.

Inflation hiked in Egypt due to a litany of many-sided challenges; including the Russian war on Ukraine, the rising prices of food and energy globally, supply chain disruptions, and the already existing impacts of the COVID-19 pandemic.

The Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) is expected to hold a meeting on 19 May to discuss its key interest rates targeted the latest economic developments on the local and global levels, particularly with regards to inflation.

As a result to the elevating inflation, the CBE increased its key interest rates in an unscheduled meeting held in March by one percent (100 basis points) and decreased the Egyptian pound by 14 per cent.

The CBE said that such actions target to protect the gains of Egypt’s economic reform programme, restrict the rising inflation, and keep foreign currency in the local market.

The US Federal Reserve has rose its benchmark rates by 0.75 percent (75 basis points) since March on a global level, seeing a 2.8 percent hike in interest rates by the end of 2022 in a bid to contain the negative repercussions of the inflationary wave.