The Central Bank of Egypt (CBE) said that annual headline urban inflation fell for the fourth month in a row, to 29.8% in January 2024, down from 33.7% in December 2023 and from its peak of 38% in September 2023.
The CBE said that the slowdown in January 2024 was due to the favorable base effects of high inflation in early 2023. Annual food inflation dropped in January 2024, for the fourth month in a row, to its lowest level in a year at 47.9%, compared to 60.5% in December 2023. Meanwhile, annual non-food inflation stayed stable at 19.6% in January 2024.
Annual core inflation, which excludes volatile items, also declined for the seventh month in a row, to 29% in January 2024, down from 34.2% in December 2023 and from its peak of 41% in June 2023.
The CBE said that for the first time since May 2022, annual headline inflation rates were higher than annual core inflation rates, indicating the fading of the shocks to core items. This was in line with monthly core inflation recording 2.2% in January 2024, compared to 6.3% in the same month last year.
Monthly headline urban inflation recorded 1.6% in January 2024, compared to 4.7% in the same month last year. The CBE said that monthly inflation reflected increases in core food, regulated services, and retail items, and was partly offset by lower prices of volatile food. Higher regulated prices mainly reflected recent government announcements regarding metro tickets and subscriptions, and electricity services, which increased by 18.9% and 14% for the first time since 2020 and 2021, respectively.
The CBE said that annual rural inflation fell to 32.5% in January 2024 from 36.8% in December 2023. Also, nationwide annual headline inflation fell to 31.2% in January 2024 from 35.2% in December 2023.
The CBE said that prices of fresh fruits and vegetables declined by 1.3% and 9.2% respectively, reducing monthly headline inflation by 0.47%. Prices of oils and fats increased by 6.5%, adding 0.20% to monthly headline inflation. Prices of red meat and poultry increased by 2.5% each, adding 0.28% to monthly headline inflation. Prices of dairy products increased by 3%, adding 0.14% to monthly headline inflation. Prices of fish and seafood increased by 2.2%, adding 0.06% to monthly headline inflation. Prices of market rice increased by 2.3%, adding 0.04% to monthly headline inflation. Prices of other core food items, including pulses, pasta, eggs, market tea, and coffee, among others, increased, adding 0.31% to monthly headline inflation.
The CBE said that prices of regulated items increased by 2.2%, adding 0.44% to monthly headline inflation. This was mainly driven by an increase in electricity, metro, public inland transportation, and landline phone services, despite a slight decline in tobacco prices.
Prices of services increased by 1.3%, adding 0.37% to monthly headline inflation. This was mainly driven by mobile phones and internet services, expenditure on restaurants and cafes, rental values, and private inland transportation.
Also, prices of retail items increased by 1.7%, adding 0.22% to monthly headline inflation. This was driven by personal care products, household cleaning products, clothing, and jewelry, among others.
The CBE said that monthly core inflation was affected by price changes of the core CPI items. Core food items added 1.42% to monthly core inflation. Services added 0.50% to monthly core inflation. Retail items added 0.30% to monthly core inflation.
