Egypt’s annual headline urban inflation slowed down for the third consecutive month, reaching 33.7% in December 2023, down from 34.6% in November 2023, according to the Central Bank of Egypt (CBE). This was due to favourable base effects. Annual food inflation also decelerated for the third consecutive month, recording 60.5% in December 2023, down from 64.5% in November 2023. However, this was partially offset by a slightly higher annual non-food inflation, which increased to 19.7% in December 2023, up from 19.5% in November 2023.
Annual core inflation, which excludes volatile food and regulated items, witnessed a slowdown for the sixth consecutive month, reaching 34.2% in December 2023, down from 35.9% in November 2023 and from its peak of 41.0% in June 2023. This was in line with monthly core inflation, which recorded 1.3% in December 2023, compared to 2.6% in the same month last year.
Monthly headline urban inflation recorded 1.4% in December 2023, compared to 2.1% in the same month last year. In December 2023, monthly inflation reflected a broad-based increase in prices across various categories, such as volatile food, core food, tobacco, retail items, and services.
Annual headline rural inflation declined to 36.8% in December 2023, from 38.2% in November 2023. Additionally, nationwide annual headline inflation declined to 35.2% in December 2023, from 36.4% in November 2023.
Prices of fresh fruits and vegetables increased by 3.7% and 6.6%, respectively, contributing 0.37% to monthly headline inflation. This was against their normal seasonal pattern, mainly driven by a strong rise in the prices of onions, potatoes, and cucumbers.
Prices of rice increased by 10.1%, contributing 0.16% to monthly headline inflation. Prices of dairy products increased by 2.5%, contributing 0.11% to monthly headline inflation. Prices of red meat increased by 1.1%, contributing 0.06% to monthly headline inflation. Prices of edible oil increased by 9.7%, contributing 0.06% to monthly headline inflation. Prices of fish and seafood increased by 1.4%, contributing 0.04% to monthly headline inflation. Prices of poultry declined by 4.4%, contributing negative 0.26% to monthly headline inflation.
Prices of other core food items, such as pulses, pasta, market sugar, market tea, and coffee, among others, increased, contributing 0.29% to monthly headline inflation.
Prices of services increased by 1.0%, contributing 0.27% to monthly headline inflation. This was primarily driven by expenditure on restaurants and cafes, higher rental values, and private healthcare.
Prices of retail items increased by 1.7%, contributing 0.22% to monthly headline inflation. This was mainly attributed to clothing, household cleaning products, and personal care products, among others.
Prices of regulated items increased by 0.4%, contributing 0.08% to monthly headline inflation. This was primarily driven by an increase in tobacco prices, which recorded a cumulative monthly increase of around 62.7% in 2023.
Monthly core inflation was affected by price changes of the aforementioned core CPI items. Core food items contributed 0.64% to monthly core inflation. Services contributed 0.37% to monthly core inflation. Retail items contributed 0.30% to monthly core inflation.
