Annual urban inflation eased to 34.6% in November 2023, from 35.8% in October 2023, due to favourable base effects resulting from inflationary pressures during the same period last year caused by supply chain disruptions and exchange rate volatility, according to the Central Bank of Egypt (CBE).
In November 2023, most items saw a decline on an annual basis, except for prices of regulated items, rice, sugar, and clothing.
Annual food inflation dropped for the second month in a row to 64.5% from 71.3% in October 2023, marking its lowest annual rate in 6 months. This was partly offset by higher annual non-food inflation of 19.5% in November 2023.
Annual core inflation slowed down for the fifth month in a row to 35.9% in November 2023, from 38.1% in October 2023. This was in line with monthly core inflation of 1.0% in November 2023, compared to 2.7% in November 2022.
Monthly urban inflation was 1.3% in November 2023, compared to 2.3% in the same month last year.
In November 2023, monthly inflation reflected the increase in prices of regulated, retail, and service items. Regulated items’ inflation was driven by the increase in tobacco prices (on 4 November 2023) due to the imposed taxes on tobacco products and the market’s reaction to it following the approved amendment to the 2016 VAT law. It was also affected by the increase in fuel prices, as announced by the Automatic Fuel Indexation Committee on 2 November 2023.
Meanwhile, retail items’ inflation mainly reflected the increase in clothing prices, which was in line with its seasonal pattern. Services inflation reflected the usual drivers of higher prices, such as restaurants and cafes’ and rental values. Monthly food inflation reflected the seasonal decline in prices of volatile food items and a relatively slower increase in core food prices.
Annual rural inflation fell to 38.2% in November 2023, from 41.1% in October 2023. Also, nationwide annual inflation decreased to 36.4% in November 2023, from 38.5% in October 2023.
Prices of regulated items rose by 4.6%, contributing 0.91% to monthly headline inflation. This was mainly driven by higher tobacco prices (16%), and higher domestic fuel prices as announced by the indexation mechanism on the 2nd of November 2023.
Prices of fresh fruits and vegetables fell by 1.9% and 5.7%, respectively. Together, they contributed a negative 0.32% to monthly headline inflation. This was due to the fading of the recent weather-related inflationary shock and their seasonal pattern.
Prices of poultry fell by 3.9%, contributing negative 0.24% to monthly headline inflation. Prices of dairy products rose by 3.3%, contributing 0.15% to monthly headline inflation. Prices of market sugar and rice rose by 22.2% and 9.0%, respectively, contributing 0.23% to monthly headline inflation.
Prices of red meat rose by 1.0%, contributing 0.06% to monthly headline inflation. Prices of other core food items such as market tea, coffee, eggs, and fats, among others, rose, contributing 0.23% to monthly headline inflation.
Prices of retail items rose by 1.4%, contributing 0.19% to monthly headline inflation. This was mainly attributed to clothing and footwear, household cleaning products, personal care products, and vehicles, among others.
Prices of services rose by 0.4%, contributing 0.12% to monthly headline inflation. This was mainly driven by expenditure on restaurants and cafes, higher rental values, and inland transportation.
Monthly core inflation was affected by price changes of the aforementioned core CPI items. Core food items contributed 0.57% to monthly core inflation. Retail items contributed 0.25% to monthly core inflation. Services contributed 0.16% to monthly core inflation.
