Urban inflation in Egypt continued its decline for the third consecutive month, primarily due to a favorable base effect. However, certain food prices increased while others decreased due to the challenges associated with importing goods and the requirement for hard currency.
Read more: Egypt inflation forecast: New all-time high expected in August
The Central Agency for Public Mobilization and Statistics (CAPMAS) in Egypt disclosed that the annual inflation rate in urban areas dropped to 33.7 percent in December, down from 34.6 percent in November.
Data indicates that food and beverage prices surged by 60.5 percent compared to the previous year in December.
Month-on-month, Egypt’s urban inflation increased by 1.4 percent in December, compared to 1.3 percent in November.
The country is currently grappling with rising commodity prices resulting from the aftermath of the Russo-Ukrainian conflict and currency devaluation.
Last week, the release of a survey indicated that Egypt’s non-oil private sector activity contracted for the thirty-seventh consecutive month in December. The persistent challenges of a weak currency and import restrictions continue to impede business operations.
Egypt is facing an economic crisis characterized by high inflation, a severe shortage of foreign currency, and significant borrowing levels over the past eight years.
To address the scarcity of foreign exchange, the government has implemented import restrictions and devalued the national currency by threefold since early 2022, leading to a depreciation of around 50 percent against the U.S. dollar.
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