Egypt’s annual headline inflation continues to rise

Egypt’s inflation accelerated amid the global inflationary wave that was first triggered by the Omicron wave of the pandemic and now the Russian-Ukrainian conflict.

CAPMAS explained that the increase in the annual headline inflation rate was mainly driven by the significant rise in food and beverage prices, which climbed by 33.2 percent, transportation by 6.5 percent, education by 13.9 percent, and entertainment and culture by 28.6 percent.

Moreover, it attributed the rise in the monthly inflation rate to the increase in the prices of food and beverages by 4.5 percent, entertainment and culture by 13.3 percent, and hotels and restaurants by 6.1 percent.

Furthermore, the country’s annual headline inflation has started to break the limit the Central Bank of Egypt (CBE) had set for it in 2022 at seven percent (±2 percent).

In early April, Fitch Solutions raised its projections for Egypt’s inflation in 2022 to 10 percent, up from the 7.1 percent it had projected in February, making it the third highest inflation rate in the region following Lebanon and Iran.

Responding to the pressures of the ongoing economic challenges, the government lowered its real GDP target for FY2022/23, which will begin in July, to 5.5 percent, down from 5.7 percent.

The government has recenty set fixed prices on unsubsidised bread - a key staple for Egyptians, in an effort to rein in inflation as the Russian-Ukrainian conflict disrupted wheat supply and pushed prices up globally.