Egypt’s annual headline inflation increases to 32.9% in April

CAIRO – 10 May 2017: Egypt’s headline inflation surged to 32.9 percent year-on-year in April, compared to 10.9 percent last year, the Central Agency for Public Mobilization and Statistics (CAPMAS) said in a Wednesday statement.

Meanwhile, the monthly inflation rate continued to decelerate to 1.8 percent in April, from 2.1 percent in March, 2.7 percent in February and 4.3 percent in January.

The inflation hike in April was propelled by a rise in the prices of vegetables by 7.2 percent, meat and chicken by 2.5 percent, fish and seafood by 7.9 percent, fruits by 4.6 percent and fast food by 0.7 percent, according to CAPMAS.

Inflation has been on the rise in Egypt in the recent period after the decision of the Central Bank of Egypt (CBE) last November to float the local currency in a move that led to a 50 percent decline in the Egyptian pound’s value against the dollar.

This came as part of the government’s reform program, started in 2014, to trim the budget deficit and acquire a $12 billion loan from the International Monetary Fund (IMF).

A research note from Capital Economics, a London-based macroeconomic research group, said last month that the sharp rise in inflation over the past few months can largely be attributed to the effects of a weaker Egyptian pound as this decline in the local currency’s value against foreign currencies has pushed up the cost of imports, while firms have been quick to pass the hit on to consumers.

Inflation was also exacerbated by levying a value added tax (VAT) in addition to cutting energy subsidies late last year.