Inflation rose 0.7% during the month of August, the Central Agency for Public Mobilisation and Statistics (CAPMAS) indicated in its latest report issued September 10, with the rate up 10.9% year on year to 139.3 points.
Increases in inflation rates from January to August 2013 totaled 9.4% compared to the same period during the previous year. Monthly inflation rates for urban consumers in August increased 0.7% reaching 136.9 points, while year on year increases totaled 9.7%. Inflation rates for rural consumers in August also totaled 0.7% reaching 142.2 points, with year on year inflation totaling 12.3%, according to state-run MENA.
The Agency announced that the price of vegetables increased 5.2% in August compared to July, while fish and sea food increased 2.4%. The price of fruit meanwhile increased 1.3%, with meat and poultry up 0.5%, and prices for clothes and shoes decreasing 3.4%, state-run MENA reported.
Heba Khalil, the head of economic research at the Egyptian Centre for Social and Economic Rights (ECESR), said that inflation rates are one of the major dilemmas that face Egyptian citizens, affecting them on a visible and direct level.
“Government reports have shown that food and drink products are continually increasing,” Khalil said. “The Egyptian Food Observatory research has previously shown that 86% of the vulnerable Egyptian households are not able to afford their consumption needs due to these high inflation rates.”
Monthly price increases for food and drink were up 1.5%, reaching 160.6 points, with year on year increases totaling 14%. Prices of bread, grains and rice also increased, in addition to that of poultry and fish, both frozen and fresh, MENA reported.
“So far the policies and issues announced by the new government to address the issue of inflation are similar to the ones seen during the Mubarak regime,” Khalil said. “Unlike Morsi’s government, the new government has an economic vision but the problem of inflation shouldn’t be ignored. The government must have inflation targeting policies that address the issue on deeper levels than the value of the Egyptian pound and the economic situation. The well-being of the Egyptian citizens should be a point of focus.”
Inflation was at its highest in two years in May when it recorded 8.2% compared to July’s 2011’s 10.4%.
Commenting on the continues rise of the inflation rate, Magdy Toulba, an economic expert and chairman of Arabian House of Consultancy for Financial and Economic Investment, said that the inflation rates have reached “alarming levels.”
In May, the International Monetary Fund (IMF) had predicted that consumer price inflation would reach 10.9% by the end of the 2013 fiscal year in June.
“Inflation is expected to rise in Egypt, Jordan, Morocco, and Tunisia, reflecting recent and planned subsidy cuts and, in some cases, pressure from monetisation of fiscal deficits and supply shortages,” a report on the IMF’s Regional Economic Outlook for the Middle East and Central Asia read.
The report also expected the inflation rate will further rise to 11.6% in 2014, as the Egyptian government continues to introduce tax hikes and curb subsidies.
Interim Prime Minister Hazem El-Beblawi had announced that several measures will be taken to reduce inflation.
Measures announced by the Prime Minister and his deputy, Ziad Bahaa El-Din, include the study of revitalisation and development of agricultural production by granting debt exemptions to small farmers.
On 4 August, a statement issued by the Ministry of Finance stated that the government has allocated EGP 473.2m of its new budget in fiscal year 2013-2014 to supporting farmers, compared to EGP 183.9m in the previous year.
