Central Bank attributes March’s lowered inflation rate to significant drop in food inflation

Cairo – April 17, 2024: In a recent note, the Central Bank of Egypt (CBE) revealed the main factors that contributed to last month’s lowered inflation rate, which was primarily attributed to a strong decline in food inflation.

Egypt’s annual urban inflation, which fell to 33.3 percent in March 2024 from 35.7 percent in February, was mainly attributed to “the muted monthly dynamics observed in March 2024, characterized by subdued price increases across the board, along with a favorable base effect”.

A decrease in annual food inflation, which settled at 45 percent in March, its lowest since December 2022, was noted as a driving factor.

The CBE’s note explained that this could signal a gradual easing in food inflation after it peaked at 73.6 percent in September 2023.

Annual non-food inflation remained steady at 25.7 percent, slightly lower from 26.1 percent in February.

Annual core inflation dropped to 33.7 percent in March 2024, declining from 35.1 percent in the prior month, reflecting a “weaker core food contribution, and comes in line with monthly core inflation recording 1.4 percent in March 2024”.

Monthly headline inflation fell to 1.0 percent, its lowest rate since October, after reaching its highest recorded month-on-month hike of 11.4 percent in February.

Impacting Egypt’s monthly headline inflation were fresh vegetable prices which fell by 4.8 percent, while fresh fruit prices remained mostly unchanged. Prices for pulses and edible oils dropped by 8 percent and 1.8 percent, respectively.

Keeping the inflation rate up were poultry and red meat prices which climbed by 3.3 percent and 1.0 percent. Dairy products jumped by 2.2 percent, while sugar prices surged by 5.1 percent. Fish and seafood prices climbed by 1.2 percent.

Other essential food groups, including eggs, market tea, coffee, dried fruits, and bread, experienced price increases.

Service prices climbed by 1.4 percent, driven by increased spending on restaurants and cafes, outpatient services, private healthcare, rental values, as well as Umrah trips.

Retail items saw a slight incline of 1.5 percent, contributing 0.2 percent to the monthly headline inflation, and were primarily pushed by items such as medical products, apparel, household cleaning items, and personal care products.