Egypt’s annual headline urban inflation increased to 32.7% in March 2023, up from 31.9% in February 2023. Annual headline inflation in March 2023 continued to be primarily driven by higher food prices and supported by higher prices of non-food items. Annual food and non-food inflation continued their upward trend to record 62.9% and 18.3%, respectively.
Monthly headline urban inflation decelerated in March 2023 to record 2.7% down from 6.5% in February 2023. The deceleration was mainly attributed to the significantly slower pace of increase in core food prices compared to the previous two months.
On the other hand, prices of regulated items increased, reflecting higher domestic fuel prices as announced by the Automatic Price Indexation committee on the 2nd of March 2023. In addition, prices of volatile food items increased in line with their seasonal pattern.
Partially impacted by favourable base effects, annual core inflation broke its upward trend that started more than a year ago, to record 39.5% in March 2023, down from 40.3% in February 2023. Monthly core inflation strongly decelerated to record 2.5% in March 2023, compared to 8.1% in February 2023 and 3.1% in March 2022, driven mainly by the recent development in core food prices (mainly poultry, red meat and fish & seafood).
Nationwide annual inflation increased to 33.9% in March 2023 from 32.9% in February 2023. Additionally, rural annual inflation increased to record 35.2% in March 2023 from 33.8% in February 2023.
Prices of fresh vegetables and fresh fruits increased by 16.1% and 4.1%, respectively. Together, they contributed by 0.58% to monthly headline inflation.
Prices of regulated items increased by 1.3%, to contribute by 0.25% to monthly headline inflation. This was mainly due to the increase in fuel prices (by an average of 10%), as announced by the Automatic Price Indexation committee in March 2023, as well as the increase of both inland transportation prices and the issuance fees of personal identification and marriage paperwork.
Prices of red meat increased by 9.4% compared to 19.9% in February 2023, to contribute by 0.47% to monthly headline inflation.
Prices of poultry increased by 2.3%, to contribute by 0.16% to monthly headline inflation. This comes after the sharp increases of 29.6 and 35.6% in January and February 2023, respectively. This may suggest that the transitory supply disruption affecting poultry has started to ease.
Prices of fish & seafood increased by 3.6%, compared to 19.1% in February 2023, to contribute by 0.10% to monthly headline inflation.
Prices of market rice increased by 14.8%, to contribute by 0.21% to monthly headline inflation.
Prices of dairy products increased by 1.7%, to contribute by 0.07% to monthly headline inflation.
Prices of eggs increased by 3.1% compared to 24.2% in the previous month, to contribute by 0.06% to monthly headline inflation.
Prices of other core food items including pasta, fats, and tea, coffee, among others, increased to contribute by 0.20% to monthly headline inflation.
Prices of services increased by 1.5%, to contribute by 0.46% to monthly headline inflation. This mainly reflected higher expenditure on restaurants and cafes, rents, private hospitals and outpatient services, and haircuts.
Prices of retail items increased by 1.4%, to contribute by 0.18% to monthly headline inflation. This was mainly due to an increase in the prices of personal care products, household appliances and cleaning products, clothing and footwear, and medical products.
Monthly core inflation was affected by price changes of the aforementioned core CPI items. Core food items, services and retail items contributed by 1.68%, 0.62% and 0.24% to monthly core inflation, respectively.
