Photo used for illustrative purpose.
Egypt’s annual urban consumer price inflation jumped to a higher-than-expected 25.8 per cent in January, its fastest in more than five years, from 21.3 per cent in December, data from statistics agency CAPMAS showed on Thursday.
The rise followed a series of currency devaluations starting in March 2022, a prolonged shortage of foreign currency, and continuing delays in getting imports into the country. The Egyptian pound has fallen by nearly 50 per cent since March.
January inflation was the highest since December 2017, a year after a steep devaluation.
Economists had expected a reading of 23.75 per cent, according to the median forecast in a Reuters poll of 14. Five analysts had forecast that core inflation would climb to 26.6 per cent from 24.4 per cent in December.
The central bank is expected to release the January figure later on Thursday.
Headline inflation increased across the board, but was driven especially by higher prices of food and non-alcoholic beverages, which make up 32.7 per cent of the index’s basket, “as producers continued to pass through higher import bills to shoppers”, said Allen Sandeep of Naeem Brokerage.
Month-on-month, prices soared by 4.7 per cent compared to 2.1 per cent in December, driven by a 10.1 per cent monthly surge in food and beverage prices, Sandeep said.
The high January number increases pressure on the central bank’s Monetary Policy Committee to raise interest rates when it next meets on March 30.
At its last meeting on Feb. 2, the MPC left rates unchanged, saying its hikes of 800 basis points over the last year should help to tame inflation.
Meanwhile Egypt plans to sell stakes in at least 32 companies by the end of March 2024, Prime Minister Moustafa Madbouly said, dusting off plans that have largely lain dormant for years as the country’s financial woes mounted.
Among the planned sales are stakes in three prominent banks, Banque du Caire, United Bank of Egypt and Arab African International Bank. Insurance, electricity and energy companies will also be on the block as well as hotels and industrial and agricultural concerns.