Egypt’s annual non-food inflation declined to 4% in October 2021 from 4.9% in September 2021, the lowest level since December 2012. This decline was mainly driven by a weaker price increase of the education group compared to the previous year.
Meanwhile, the annual food inflation increased for the sixth consecutive month to reach 11.6% in October 2021 – the highest level since May 2019 – up from 10.6% in September 2021, reflecting higher annual contribution of core food items.
In addition, the annual urban inflation declined to 6.3% in October 2021 from 6.6% in September 2021. This monthly urban inflation recorded 1.5% in October 2021 down from 1.8% in October 2020.
Monthly urban inflation decrease in October 2021 was mainly driven by non-food items. The increase in non-food items’ prices reflected the seasonal increase in education and education-related prices, which was reflected in regulated items, services and retail items. Additionally, the Fuel Indexation Committee raised the prices of select fuel products during its last meeting in October 2021.
Moreover, prices of core food items increased, especially poultry, eggs, and red meat, reflecting broadly the impact of higher international food inflation.
On the other hand, volatile food items’ prices declined, broadly in line with their seasonal pattern and the resulting increase of their supply, as well as due to the decline in tomato prices after their increase during the previous month as expected.
On an annual basis, the decline in headline inflation during October 2021 was driven by the lower annual contribution of non-food items, which was partially offset by a higher annual contribution of food items.
Driven by the higher annual contribution of core food items, annual core inflation increased in October 2021 to 5.2% from 4.8% in September 2021. This comes as monthly core inflation recorded 2.1% in October 2021, compared to 1.7% in October 2020.
Nationwide, annual inflation and annual rural inflation declined to record 7.3% and 8.4% in October 2021 from 8% and 9.5% in September 2021, respectively.
Prices of fresh fruits and vegetables declined by 7.3% and 3.2%, respectively. Together, fresh vegetables and fresh fruits contributed by – 0.27% to monthly headline inflation.
Prices of poultry increased for the second consecutive month by 8.4%, to contribute by 0.32% to monthly headline inflation. Prices of eggs increased for the fifth consecutive month by 10%, to contribute by 0.11% to monthly headline inflation. Prices of red meat increased by 1.6%, to contribute by 0.06% to monthly headline inflation. Prices of fish and seafood increased by 1.3%, to contribute by 0.03% to monthly headline inflation.
Prices of other core food items, including dairy products, sugar, rice, oils and fats increased to contribute by 0.08% to monthly headline inflation.
Prices of regulated items increased by 1.3%, contributing by 0.32% to monthly headline inflation. This was mainly due to seasonally higher tuition fees of public schools, public hospitals and higher prices of select fuel products as announced by the Fuel Indexation Committee during its last meeting in October 2021.
Prices of services increased by 2.0%, to contribute by 0.70% to monthly headline inflation. This was mainly due to seasonally higher tuition fees of private schools and private lessons.
Prices of retail items increased by 1.2%, to contribute by 0.16% to monthly headline inflation. This was mainly due to higher prices of books as well as clothing; especially school uniforms.
Monthly core inflation was affected by price changes of the aforementioned core CPI items. Services items contributed by 1% to monthly core inflation. Core food items contributed by 0.85% to monthly core inflation. In addition, retail items contributed by 0.23% to monthly core inflation.
