Urban Inflation in Egypt Soars to 35.7% in February

In February, Egypt saw a significant increase in its annual urban consumer price inflation, rising to 35.7% from 29.8% in January. The spike was primarily fueled by higher prices in the food and beverage sector, according to data released by the statistics agency CAPMAS on Sunday.

The rise in inflation is already making an impact, and it is set to worsen following last week’s currency devaluation. The central bank decided on Wednesday to let the Egyptian pound drop to around 50 to the dollar from the fixed rate of 30.85 it had maintained for the past year.

According to a recent survey of 14 analysts, it was anticipated that Egypt’s inflation rate would decrease to a median of 25.1% in February. Prior to February, the inflation rate in Egypt had been on a downward trend from a record high of 38.0% in September.

Month-on-month, prices rose by 11.4% in February, up from just 1.6% in January. Food prices leapt by 15.9%, up from 1.4% in January.

“The sharp rise in the annual reading was fuelled by a surge in monthly inflation of both food (F&B) and non-food items and was in spite of the favourable base year contribution of -5.5%,” Allen Sandeep of Naeem Brokerage sais in a note.