Headline inflation slows to 35.8% as food and beverage inflation see slight drop

Cairo – November 12, 2023: Annual headline inflation slowed in October to 35.8 percent, decelerating from its record-breaking 38 percent in September, revealed the latest data from the Central Agency for Public Mobilization and Statistics (CAPMAS).

On a monthly basis, inflation eased to 1 percent in October from 2 percent in September.

Driven by declining food and beverage price inflation, Egypt’s urban consumer price inflation also dropped to 35.8 percent last month from 38 percent in September.

Holding the largest percentage of the basket of goods and services used to calculate inflation, food and beverage price inflation slipped to 71.3 percent year-on-year in October, down from a high of 73.6 percent in September, and rising by 1.5 percent month-on-month.

The decline can be attributed to the government’s commodities reduction initiative which aims to curb inflation and promote price stability.

The high number was due to a 101.5 percent hike in vegetable prices and a 97 percent climb in meat and poultry prices, according to CAPMAS data.

The utilities segment - housing, water, electricity, gas, and fuel – saw an annual increase of 7.5 percent in October.

CAPMAS explained that the culture and entertainment segment’s prices rose by 52.6 percent annually. The hospitality segment (restaurants and hotels) rose by 45 percent year-on-year, according to CAPMAS data, followed by a 40.2 percent annual increase in the home appliances segment.

“Inflation has been bearing the effect of three devaluations of the pound since 2022, and bouts of weakness in the parallel currency market may continue to feed in consumer prices,” explained Goldman Sachs in a report over the weekend.

The Investment banking company added that there was some light at the end of the tunnel, noting “the weakening of the pound in the parallel market suggests broader upward pressure on domestic prices going forward”.