Egypt annual inflation eases to 27.1%

A decrease in food prices contributed to Egypt’s annual consumer price inflation rate reaching 27.1 percent in June, slightly down from 27.4 percent in the previous month, according to data.

The latest report from Egypt’s Central Agency for Public Mobilization and Statistics showed the general consumer price index for June 2024 stood at 225.6 points.

This change follows the central bank’s announcement in early March of a 600 basis point interest rate hike and a shift to an inflation-targeting regime that allows the exchange rate to be set by market forces.

The reduction in annual inflation can be attributed to declines in several categories, such as fish and seafood prices, which fell by 0.1 percent, oils and fats by 0.3 percent, fruits by 2.6 percent, and sugar and sugary foods by 1 percent.

Prices for textiles and other clothing accessories decreased by 7 percent and 2.8 percent, respectively.

Conversely, certain categories experienced price increases. Grains and bread prices rose by 13.5 percent, meat and poultry by 3.7 percent, vegetables by 2.3 percent, and other food products by 1.3 percent.

Prices for mineral and sparkling water and natural juices increased by 0.7 percent, while ready-made clothing saw a rise of 1.4 percent. Shoes and actual housing rent also experienced price hikes of 2.5 percent and 0.6 percent, respectively.

The furniture, furnishings, and household maintenance sector saw a 0.7 percent increase. Within this division, home furnishings prices rose by 0.9 percent, household appliances by 1 percent, glassware, tableware, and household utensils by 0.5 percent, and goods and services used in home maintenance by 0.5 percent.

The healthcare sector experienced a 2.7 percent increase, attributed to a 4 percent rise in prices for medical products, appliances, and equipment and a 0.8 percent increase in hospital service costs.

A chronic lack of foreign currency has dragged down Egypt’s economy. That has been alleviated however by a $24 billion real estate deal with the UAE in late February, plus a sharp devaluation of the currency and the signing of an $8 billion agreement with the International Monetary Fund in early March.

In June, Egypt’s Planning Minister Hala al-Saeed predicted the country’s economy would grow by 2.9 percent or 3 percent in the financial year to end June before accelerating to 4.2 percent in 2024/25, according to a ministry statement.