Egypt has been grappling with high inflation rates in recent years due to a variety of factors, including currency fluctuations, and rising food prices. The government has implemented various measures to curb inflation, such as reducing subsidies on fuel and electricity, but the issue continues to pose a significant challenge for the country.
Read more: IMF does not see inflation in Egypt waning before 2024
Egypt’s annual inflation rate reached its highest level ever in March, rising to 33.9% from 32.9% in February, according to the Central Agency for Public Mobilization and Statistics (CAPMAS).
The report also revealed a steep increase in food and beverage prices, with cereals and bread rising by 69.6%, meat and poultry by 91.5%, and fish and seafood by 82.2%, as well as a rise in clothing and footwear prices by 20.9%, housing, water, electricity, gas, and fuel by 8.8%, and healthcare by 17.7%. These increases are attributed to a series of devaluations, foreign currency shortages, and import delays.
These figures follow Egypt’s currency devaluation three times since March 2022, causing the pound to drop from an average of 15.7 against the dollar to its current value of 30.6.
The previous record-high inflation rate in Egypt was 32.952% in July 2017, which occurred eight months after the government devalued the Egyptian pound by half as part of an agreement with the International Monetary Fund (IMF) for a $12 billion support package.
The devaluation of the local currency led to an increase in consumer prices due to the higher cost of imports denominated in foreign currency and the rise in production costs in local markets.
In March 2023, the Central Bank of Egypt increased its interest rate by 2% during its second meeting of the year.
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